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American Express (AXP) went on trial last week in Brooklyn over government allegations that its rules for merchants violate antitrust law. The trial, which is expected to continue until September, is merely the latest episode in the credit card industry's long-running antitrust battles. Here's a look back at some of the most important antitrust cases involving the card networks.

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Arkansas Bank Sues Visa Forerunner

In the early days of the credit card industry, the networks that would become Visa (NYSE:V) and MasterCard (MA) were owned by associations of banks, and the two networks only issued cards for banks that were their members.

In 1970, Worthen Bank and Trust Co. of Little Rock, Ark., sued Visa's forerunner, arguing that the card network's exclusivity rule violated antitrust law. The case eventually led to the rise of "dual issuance," under which banks offered some Visa cards and others that featured the MasterCard logo.

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Sears Sues Visa

In 1991 Sears Roebuck & Co., which then owned Discover (DFS) through its Dean Witter subsidiary, sued Visa for alleged antitrust violations. Sears wanted to issue a Visa credit card, using a Utah-based industrial loan corporation that the famed retailer owner. But Visa would not allow the card to be issued.

Visa's then-president testified that allowing Discover's parent company to issue a Visa card would be "tantamount to forcing Burger King to sell Big Macs." Sears won a jury trial in 1992, but nearly two years later, an appeals court reversed the decision, ruling in Visa's favor.

(Image: Bloomberg News)

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Wal-Mart and Other Large Retailers Sue MasterCard and Visa

A 1996 antitrust suit led by Wal-Mart accused Visa and MasterCard of using monopoly power in the credit card market to take control of the debit card market, too. The suit was ultimately settled out of court in 2003. The two card networks agreed to pay roughly $3 billion and to reduce swipe fees on signature-based debit transactions.

Visa and MasterCard also agreed to make changes to their "honor all cards" rules, which required merchants to accept all of one network's cards if they accepted any of that network's cards. Under the revised rules, Visa and MasterCard still require merchants that accept any of the credit cards on their networks to accept all such cards, but they now allow merchants that accept their networks' credit cards to turn down their debit cards.

(Image: Bloomberg News)

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Justice Department Sues MasterCard and Visa

In 1998 the Justice Department challenged the fact that Visa and MasterCard were essentially governed by the same banks, as well as the fact that the two major networks' rules prevented American Express and Discover from issuing their own cards through banks.

U.S. District Judge Barbara S. Jones issued a split ruling in 2001. The decision did not disrupt the long-standing system of dual issuance, but it did give American Express and Discover the ability to partner with card-issuing banks.

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American Express and Discover Sue Visa and MasterCard

Piggybacking on the Justice Department suit, American Express and Discover both filed suit against Visa and MasterCard, alleging that they'd been harmed by the old rules that prevented them from partnering with banks.

MasterCard and Visa agreed in 2008 to pay a combined $4 billion to settle with American Express. A short time later, the two card networks agreed to pay a total of $2.8 billion to Discover.

(Image: Bloomberg News)

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Retailers Sue Visa, MasterCard, and Banks Over Interchange

In 2005 a group of retailers filed a class action over credit card interchange fees. Under a settlement deal reached in 2012, the defendants agreed to pay an estimated $7.25 billion, though the final number will be smaller because some merchants opted out of the deal.

Despite the multibillion-dollar price tag, the settlement was widely seen as a victory for the defendants because going forward they retained the ability to set interchange fees. The deal does give retailers the contractual right to impose surcharges on credit card purchases, but that practice is illegal in numerous states.

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Justice Department Settles Steering Cases with MasterCard and Visa, Sues Amex

The Justice Department in 2010 took aim at provisions in the largest card networks' rules that barred merchants from steering their customers to use a particular credit card. The government alleged that these rules hurt retailers by removing any incentive for card networks to compete based on price for merchants' business.

MasterCard and Visa, both of which had gone public since the conclusion of the previous Justice Department lawsuit, agreed to settle with the government by ditching their anti-steering rules. But the Justice Department acknowledged those settlements would have little impact without the cooperation of American Express, whose rules still ban steering. Amex's decision to fight the government's allegations led to the trial that began last week in Brooklyn.

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