Corporate & Securities Law

District Court Applies Rule of Reason to Star ATM Network’s Fixed Interchange Fees

By Matthew S. Wild

On March 24, 2008, the United States District Court for the Northern District of California granted partial summary judgment and dismissed plaintiffs’ challenge to the Star Network’s fixed interchanges fees that was based on a per se violation of Section 1 of the Sherman Act.  See In re ATM Fee Antitrust Litig., No. C 04-02676 CRB, 2008 WL 793876 (N.D. Cal. Mar. 24, 2008).  This action challenges the fixed fee that the Star Network (through its members) pays to the owner of the ATM used by the cardholder.  The court applied the rule of reason because the fixed fee is “reasonably necessary to the legitimate cooperative aspects of the venture.”  Id. at *10 (citation omitted).   The court concluded that fixed nature of “the fee promotes cooperation between the venture’s members and cannot be set individually.  Under the circumstances, that is all Defendants must show to avoid a per se analysis.”  Id.  The court, however, certified the question for interlocutory appeal because there is “serious doctrinal confusion over the proper analysis of cooperative arrangements among competitors.”  Id. at 12 (citation omitted).

Full post as published by Antitrust Commentary on April 08, 2008 (boomark / email).