Priceless: The Case That Brought Down the Visa/MasterCard Bank Cartel by Lloyd Constantine Read Free Book Online Page A

little bank, Discover planned to issue millions of Visa credit cards as part of a plan to eventually shift cardholders to Discover, in part by offering them more favorable terms. This would greatly expand the Discover network. Discover’s position, and the gist of its antitrust complaint against Visa, was that competition would be increased if it could issue Visa credit cards as well as Discover credit cards.
    When Visa found out about Discover’s plan, it ordered the company licensed to manufacture Visa credit cards to stop the presses. But in trying to stop Discover from becoming a member of Visa, I thought Visa was probably right from the standpoint of competition policy. Regardless of the evil in Visa’s heart and its numerous antitrust sins, especially against Discover and American Express, I viewed a world in which Discover and American Express became members of Visa/MasterCard as a competitive problem. So I agreed to represent Visa on this narrow, but important, antitrust issue along with its usual antitrust firm, Heller Ehrman White & McAuliffe, based in San Francisco. The antitrust points were debatable, the economic theories involved were elegant, and the case was likely to be fun.
    Two hours after I agreed to represent Visa against Discover, a representative of Discover called to ask whether I would help represent Discover in the same case. I declined, explaining that I was already on the other side. In the next hour, I was overcome with self-doubt, not about my agreement to help Visa, but about whether I would have said yes to Discover if they had just called before Visa. Thinking about this was extremely uncomfortable for me at the time. I was still so thoroughly a public interest lawyer that the thought that I would simply agree to represent the first client who called was horrifying. Of course, this is what lawyers frequently do,and is their job to do. But at forty-three, I was still a litigation virgin. The true answer to the uncomfortable question about Discover is unknown, like most “what ifs.” But I think I would have represented Discover had they called first. The points in the dispute were close and debatable. Visa was an antitrust predator generally, if not in this specific instance. But most importantly, I needed the business and the interesting work.
    For the next month, the nastiness was directed at me on three fronts, eventually forcing me to withdraw as Visa’s representation. The first attack came from American Express, who went to my former boss, Attorney General Bob Abrams, complaining that there was something unethical about me representing Visa after so recently suing Visa. One doesn’t have to know anything about legal ethics to understand how silly this charge was. Indeed, representing Discover against Visa soon after the Entree case might have given Visa some cause for complaint, as they might have incorrectly inferred that confidential information obtained about Visa in my government capacity was being used against them in a private dispute. But the notion that the expertise attained by a government lawyer can’t later be used by that lawyer in private practice, even in defense of a former opponent of the government, is unknown to the law unless government secrets are being used. Nevertheless, American Express went on a rampage, calling as many of my former colleagues in the states as they could to register complaints against me.
    My former colleagues also reacted angrily to my representation of Visa. They seemed ashamed that I was “selling out” just weeks after leaving my post as their leader. They may also have been releasing some pent-up hostility about all the press I had been getting for their efforts. I might have been able to resist all that, but my law firm ordered me to drop the case. A month after the new case had passed a conflicts check, it tardily came to light that one of the McDermott partners in Chicago was doing some tax work for Dean Witter—a corporate