Court Dismisses Claims Against MasterCard by Paycom

[spunkmaster]

PURCHASE, N.Y.--(BUSINESS WIRE)--April 4, 2005--MasterCard International announced today that a U.S. District court judge has dismissed all claims brought against MasterCard International by Paycom Billing Services, Inc. The judge ruled that Paycom suffered no antitrust harm as a result of MasterCard's rules or policies.


"MasterCard is pleased that the court agreed that the plaintiff, an aggregator of payment services, failed to demonstrate that the policies at issue in this case do not harm competition. The judge also recognized that the plaintiff has multiple options for accepting payment, and could choose not to participate in our network," said Eileen Simon, MasterCard associate general counsel.

Aggregators provide payment card services to multiple merchants, including online adult content websites.

The ruling was made in the U.S. District Court for the Eastern District of New York by Judge David G. Trager. Paycom was represented by Lloyd Constantine's firm, which also represented the merchants in the class action relating to debit.

The plaintiff, Paycom Billing Services, Inc. is an aggregator of sales for Internet businesses. Paycom contracts with Internet merchants, most of which, according the court's ruling, provide online digital adult content. Paycom's primary challenge was to MasterCard's chargeback system protecting against fraudulent purchases.

The court's ruling recognized that Paycom is free to stop accepting MasterCard on behalf of its clients, or to urge its clients' customers to pay with other payment cards. The judge ruled that the plaintiff could not demonstrate that MasterCard's policies harmed competition.

"We are pleased that Judge Trager recognized that antitrust laws are designed to protect competition, not individual competitors," Simon said.

The plaintiff brought other antitrust claims, which the court dismissed, against additional MasterCard policies: its Competitive Programs Policy (CPP), Cross-Border Acquiring Rules, and Internet Merchant Qualification Mandates. The court ruled that Paycom had no standing to bring antitrust claims relating to any of these policies.

Specifically regarding the CPP claim, Judge Trager ruled that in addition to the lack of standing on its antitrust theory, plaintiffs' damages are "highly speculative" because in order to determine plaintiff's damages, a court would first have to determine, for example, how many additional fraudulent transactions on any other payment network would have occurred if the CPP did not exist. This would amount to pure speculation.

We agree with the court's decision that determining any damages under this theory would be hopelessly speculative," said Simon.

About MasterCard International

MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members' credit, deposit access, electronic cash, business-to-business and related payment programs. MasterCard International manages a family of well-known, widely accepted payment cards brands including MasterCard(R), Maestro(R) and Cirrus(R) and serves financial institutions, consumers and businesses in over 210 countries and territories. The MasterCard award-winning Priceless(R) advertising campaign is now seen in 96 countries and in 48 languages, giving the MasterCard brand a truly global reach and scope. For more information go to www.mastercardinternational.com or refer to our filings with the U.S. Securities and Exchange Commission

[spunkmaster]

Yea this really sucks. I was hoping Mastercard got boned up the ass to open up adult billing but I guess not now ?

[KMR Stitch]

That really sucks

[psyko514]

Damn... that really sucks. Paycom has some balls though.

[AlienQ - BANNED FOR LIFE]

Thats just the broad stroke.

There will prolly be more.