Word: amex
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Dates: during 2000-2009
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...government says, the same powerful banks control both associations. The biggest banks have been able to sit on one brand's board of directors and hold great sway in the other. That's not all. Visa and MasterCard restrict their member banks from issuing competing cards from Amex and Discover as well. This circle of control, the feds say, bars real competition from the marketplace, and it has kept technological leaps and new credit services from benefiting American wallets...
...belongs to Federal Judge Barbara Jones. During 10 weeks of testimony ending Aug. 22, trustbusters tried to persuade her to make the big banks align themselves with one brand if they'd like a board seat. They also asked the court to allow their banks to issue cards with Amex or Discover. The goal: increase competition between brands without impeding competition between banks...
...their defense, the associations claim that letting banks work with Amex and Discover would undermine a legitimate advantage--like forcing McDonald's to sell Burger King's fries. They say many banks have already pledged to commit more than 80% of their card business to one brand, thereby reducing their self-interest in the other and increasing competition. The defendants also wonder why Justice's proposal contradicts its expert witness, who testified that banks dedicated to one brand should be allowed to issue a small percentage of the other's cards...
...government hopes Jones will find the associations more than a little guilty, and it has even used Visa's archrival, American Express, for help. Justice opened its current investigation in 1993; by 1996, Amex had enlisted, arguing that the restrictive by-laws should go. In other countries, the company points out, it is free to issue credit cards through banks. As MasterCard general counsel Noah Hanft says of Justice's fix, however, "it's a remedy that seems catered to suit the needs of Amex." Amex is not an official party to the suit, though its lawyers attend...
...more cases, is to route the trade through Gerald Putnam's Archipelago. The Chicago firm, which created one of a new class of trading systems known as electronic communications networks (ECNs), can instantly determine where the best price is--on traditional markets, like the New York Stock Exchange, AMEX and NASDAQ, or among orders that come directly into Archipelago. Trades on the fully automated system are completed in less than a second, while a typical trade on the N.Y.S.E. takes 22 sec. "That's a lifetime in an active market," says CEO Putnam. "Our advantage comes from having no human...