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Discover Financial Services’ Pulse Network Settles Antitrust Lawsuit Against Visa

 |  June 16, 2024

Pulse Network, a unit of Discover Financial Services, has agreed to settle a long-standing antitrust lawsuit against Visa. The settlement, disclosed in a court filing on Friday in a federal court in Houston, Texas, marks the conclusion of a legal battle that began in 2014.

According to Reuters, Pulse Network had accused Visa of obstructing competition in the lucrative debit card network services market, leading to higher fees for merchants. The lawsuit alleged that Visa’s pricing structure, which included monthly and per-transaction fees, unfairly dissuaded merchants from switching to other card networks, thereby stifling competition.

The terms of the settlement remain undisclosed as the court filing, signed by both parties, did not provide specifics. Both Pulse and Visa have not responded to requests for comments or additional information regarding the settlement.

Pulse’s lawsuit sought compensation for lost profits and demanded a court order to foster healthy competition within the debit card network services industry. A trial was originally scheduled for 2026. Visa had consistently denied any wrongdoing throughout the litigation.

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The case had experienced several legal twists and turns over the years. In 2018, U.S. District Judge Lynn Hughes dismissed the lawsuit, but the decision was overturned by the New Orleans-based 5th U.S. Circuit Court of Appeals in 2022. The appellate court reassigned the case to a new judge, citing concerns that Judge Hughes may have exhibited “ingrained skepticism about Pulse’s claims.”

With the lawsuit now dismissed “with prejudice,” meaning it cannot be refiled, the resolution marks the end of a protracted legal struggle between the two financial giants. The settlement’s impact on the debit card network services market and its participants remains to be seen, as details of the agreement have yet to be made public.

Source: Reuters