MasterCard and American Express Settle for $1.8 Billion
MasterCard Worldwide agreed on Wednesday to pay $1.8 billion to its credit card rival American Express to settle claims related to a 2004 antitrust lawsuit.The settlement comes about seven months after Visa paid more than $2.1 billion to American Express to put similar claims behind as it as raced ahead with plans for an initial public offering in March. MasterCard, which went public two years ago, had been under pressure to resolve the suit since uncertainty surrounding the litigation was one of the few clouds hanging over the rapidly rising stock.
Under the terms of the deal, MasterCard will make the $1.8 billion in payments to American Express in quarterly installments over three years. It will book an after-tax charge of approximately $1 billion for the settlement costs in the second quarter.
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The announcement early Wednesday comes more than three years after the Supreme Court ruled that Visa and MasterCard had violated antitrust rules by barring their member banks from offering credit cards that could be used on rival payment networks.
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