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American Express Co. today announced a settlement with MasterCard Worldwide worth up to $1.8 billion in an antitrust lawsuit AmEx filed against the card brand in 2004. Under the agreement, AmEx will drop MasterCard from its lawsuit, which alleged that MasterCard and Visa Inc. colluded to prevent AmEx from issuing bankcards in the U.S. AmEx filed the lawsuit shortly after the U.S. Supreme Court let stand a lower-court ruling in an antitrust case won by the U.S. Department of Justice. In that case, the courts ruled that Visa's and MasterCard's exclusionary rules were anticompetitive, and the decision forced the card brands to allow their member banks to issue AmEx and Discover Financial Services cards on rival networks. In the settlement announced today, MasterCard will make quarterly payments to AmEx over three years, beginning in the third quarter and running through mid-2011. Last year, Visa settled its case with AmEx for $2.25 billion (CardLine, 11/9/07). Kenneth I. Chenault, AmEx chairman and CEO, said in a statement that the combined $4 billion in settlement fees from Visa and MasterCard represents a "very satisfactory" resolution of its lawsuits against the two card networks. He added that business conditions continue to weaken in the U.S., and so far this month AmEx has seen credit indicators deteriorate beyond expectations. The settlement should help offset the effects of a weakening economic cycle, Chenault said. Earlier this month, court documents revealed that Discover is seeking a combined $6 billion from Visa and MasterCard in a similar suit it filed in 2004 after the DOJ won its case (CardLine, 6/10).

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