Supreme Court antitrust case raises a big question for associations.
The Supreme Court is set to hear a case this fall that could have significant implications for membership associations.
The case—Visa, Inc. v. Osborn—is an antitrust class action dispute over whether membership and governance rights in a trade association are enough to constitute a conspiracy in the event of anticompetitive behavior. ASAE filed an amicus brief in the case earlier this year.
The lawsuit was filed in 2011 by several independent ATM operators who alleged that the agreement that allows them access to the Visa and MasterCard networks is anticompetitive because of rules set by banking industry associations.
The U.S. District Court for the District of Columbia dismissed the case, but the DC Circuit Court of Appeals reinstated it last August, ruling that Visa and MasterCard “member banks used the bank associations to adopt and enforce a supracompetitive pricing regime for ATM access fees.”
The argument was that members of the banking associations voted for particular board members, who then instituted ATM access fee rules with the purpose of protecting themselves and Visa and MasterCard from competition from alternate ATM networks, creating a conspiracy.
ASAE’s interest in the case concerns the legal rules governing associations and their members. In its amicus brief, ASAE argues that the appeals court decision means that member banks—or members of any association, by extension—can be found to be engaged in unlawful concerted action based on conduct that is inherent to being a member of an association, such as abiding by its rules or voting for its board members.
“The notion that these organizations and their members can be blamed for acting like associations, without any indication of complicit design, imperils the good that associations do and risks chilling the societal benefits that come with them,” the brief says.