American Express and MasterCard Worldwide today announced a $1.8 billion settlement agreement that ends a conspiracy lawsuit filed more than three years ago by American Express against MasterCard, along with Visa and their member banks.
The agreement specifies that American Express will drop the lawsuit, which alleged that Visa, MasterCard and the banks blocked American Express from having bank-issued cards in the United States, in exchange for MasterCard paying up to $1.8 billion. MasterCard will pay American Express quarterly over the next three years.
The settlement follows a $2.25 billion settlement reached with Visa late last year (BTNonline, Nov. 19, 2007)
. American Express also dropped the banks as defendants as a result of the Visa settlement.
The combined settlement of more than $4 billion is the largest in U.S. history, according to American Express. As with the Visa settlement, American Express ultimately plans to use the MasterCard payments to invest in its business.
"Business conditions continue to weaken in the U.S. and so far this month we have seen credit indicators deteriorate beyond our expectations," American Express chairman and CEO Kenneth Chenault said in a prepared statement. "While it is too early to assess the impact of these indicators, the antitrust settlement we've reached with MasterCard provides us with a multiyear source of funds that should, among other things, help to lessen the impact of this weakening economic cycle and, when conditions improve, give us the ability to step up investments in the business."