Susquehanna Issues Report On Visa (V) and MasterCard (MA) Merchant Litigation

Susquehanna Financial Group analysts James Friedman and Meghna Ladha issued a report regarding merchant litigation versus Visa Inc. (NYSE: V) and MasterCard Incorporated (NYSE: MA).

The analysts said it may have been a coincidence but Visa Inc. scheduled its earnings report for April 28, the same day as a "status Conference" for the case.

The analysts believe that there is a 70% chance of a settlement, 20% chance of a trial and only a 10% chance that the case will be dismissed.

The Susquehanna Financial Group analysts gave a summary of the allegations: "The main claim alleges that MA’s and V’s purported “tying and bundling” of interchange fees violates Section 1 of the Sherman Act, the landmark nineteenth century anti-trust legislation that restricts anti-competitive behavior. Interestingly, the plaintiffs also believe that the IPOs of V and MA aggravated the violations, in that: 1) there is too much bank overlap on the Boards of the Associations; and 2) provisions in the V and MA public structure preclude takeover should the merchants seek to acquire them."