Visa, Aldi squabble over demand for documents showing Aldi's decision to take credit cards didn't hurt

By Dan Churney | Jun 22, 2018

Mired in a long-running anti-trust class action brought by millions of merchants who seek billions of dollars in connection with credit card processing fees, Visa wants the Aldi food store chain, which several months ago adopted a policy accepting cards from customers, to turn over documents that will presumably show Aldi freely chose to honor Visa cards, despite allegations Visa tried to throttle competition.

By Mike Mozart from Funny YouTube, USA (Aldi) [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Mired in a long-running anti-trust class action brought by millions of merchants who seek billions of dollars in connection with credit card processing fees, Visa wants the Aldi food store chain, which several months ago adopted a policy accepting cards from customers, to turn over documents that will presumably show Aldi freely chose to honor Visa cards, despite allegations Visa tried to throttle competition.

Visa’s attorneys filed arguments June 8 in Chicago federal court, arguing Aldi should provide the records, even though Aldi is otherwise not a party to the litigation.

A multi-district class action, involving 12 million merchants, began in 2005 in U.S. District Court for Eastern New York, which alleged Visa and MasterCard violated federal antitrust law to stifle competition. The case centers on interchange fees, which are the fees merchants pay when a customer uses a credit card.

The two credit card giants allegedly let banks impose inflated interchange fees and require them to honor all Visa and MasterCard cards if they accept any of them, regardless of differences in fees. Further, the companies prohibit merchants from charging customers different prices depending on the means of payment, according to the suit.

As part of the case, Visa subpoenaed Aldi for records and deposition concerning Aldi’s decision to accept Visa cards in 2016, after having never before accepted Visa, having only taken PIN-debit cards. Visa said Aldi’s decision is “central to Visa’s defenses,” but Aldi is fighting the subpoenas.

Aldi is headquartered in Germany, with a U.S. base in suburban Batavia. The discount supermarket chain runs stores around the globe, including 1,600 outlets in the U.S. Aldi is not one of the 100 plaintiffs in the case.

Visa contends the desired records will show it doesn’t choke competition, but rather promotes it.

“Aldi presumably weighed the benefits of acceptance against its costs and conditions and concluded that acceptance was worth it. Visa seeks to demonstrate that its rules are procompetitive, and it is evidence of that positive effect that merchants freely choose to accept Visa products because the benefits outweigh the costs and conditions,” Visa maintained.

Visa added the fact Aldi prospered for decades without accepting Visa, allegedly “undermines” plaintiffs’ argument Visa’s practices effectively left large merchants with no choice but to honor Visa cards.

According to Visa, there is little burden on Aldi to supply the material, because Aldi’s attorney said in May many of the documents had already been collected. Further, Visa said it has “gone out of its way to minimize” any hardship on Aldi, including an offer to cover Aldi’s costs in furnishing the records.

Aldi has raised concern about confidentiality and its status as an “absent” class member to the suit. However, Visa asserted these concerns have already been resolved by a federal judge in the Eastern District of New York, that balances Aldi’s worry with Visa’s needs, limiting the requested information to a small circle.

As far as Aldi’s absent member status, Visa said procedures have been established in the 13-year-old case for discovery from absent class members.

A status hearing is set for July 26 before U.S. District Judge Sara Ellis.

Visa is represented by the Chicago firm of Arnold & Porter Kaye Scholer and the New York City firm of Holwell, Shuster & Goldberg.

Aldi is represented by Seyfarth Shaw LLP, of Chicago.

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Organizations in this Story

ALDI Inc Arnold & Porter Kaye Scholer LLP Seyfarth Shaw, LLP U.S. District Court for the Northern District of Illinois Visa International

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