ATM Fee Challenged Dismissed With Leave to Amend

In In re: ATM Fee Antitrust Litigation, Northern District of California Judge Charles R. Breyer has dismissed a putative antitrust action over fees charged by financial institutions in First Data Corp.’s ATM network, but giving the plaintiffs an opportunity to amend their claims.   The complaint alleged a conspiracy to (1) fix interchange fees that the banks pay each other when depositors use ATMs belonging to competitors and (2) pass those fees along to consumers with a markup as a foreign ATM fee.  Judge Breyer rejected this argument, ruling that the plaintiffs had not shown that customers were “locked in” to the Star network or that there were barriers to customers switching banks.  The Court, however, denied another motion to dismiss by the banks, which claimed that the plaintiffs’ failed to allege an antitrust violation because it was necessary for banks to collectively set the interchange fee as a group in order to run the network.  The court held that collectively setting rates was not obviously essential to the network.

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