Justice Department investigating Mastercard over potential antitrust violations

Mastercard investigation overview: 

• Who: Mastercard Inc. reported in a recent filing that it is being investigated by the United States Department of Justice.
• Why: The Department of Justice required Mastercard to provide information on its debit card program related to potential violations of the Sherman Act related to antitrust.
• Where: The inquiry is related to Mastercard’s activity in the United States.

Mastercard Inc. revealed in its recent quarterly filing that it is the subject of an investigation by the United States Department of Justice Antitrust Division related to potential antitrust violations involving the company’s debit program.

Mastercard posted the information in its quarterly report to the United States Securities and Exchange Commission, called a form 10-Q. Mastercard said that it received a Civil Investigative Demand in March 2023 from the DOJ.

The Mastercard investigation was looking at potential violations of Section 1 or Section 2 of the Sherman Act. Section 1 involves restraints on trade, while Section 2 is regarding monopolies and anticompetitive conduct.

The potential Mastercard violations being investigated relate to “competition with other payment networks and technologies,” according to Mastercard’s filing.

“Mastercard is cooperating with the DOJ in connection with the CID,” the filing stated.

Mastercard also came to a consent agreement with FTC, filing states

Mastercard’s 10-Q filing also indicated a consent agreement had been reached after the United States Federal Trade Commission’s Bureau of Competition looked at whether the company’s debit routing violates the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The Durbin Amendment had capped fees assigned to companies accepting debit cards from banks with more than $10 billion in assets.

Mastercard is also facing a class action lawsuit related to an alleged 381,000 unsolicited faxes sent to individuals advertising a Mastercard co-brand card issued by First Arkansas Bank. The class was certified after the court ruled that defendants who received the fax via an online fax receipt service were not eligible because that form of communication is not part of the Telephone Consumer Protection Act.

The FTC voted in December to accept a consent agreement with Mastercard related to the violation where merchants can now send online debit transactions to alternative networks. Mastercard is awaiting a finalized decision on the consent agreement.

The Justice Department previously investigated Goodyear Tire and Rubber Co. for the way it handled a recall on a tire that was linked to eight deaths and dozens of injuries.

Have you had an issue with fees charged by credit card companies? Let us know in the comments.

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