Things You Don't Hear Every Day
Officials
of the major credit card companies clashed May 25 as they each testified
before a Senate hearing. The hearing addressed the government’s lawsuit
accusing Visa and MasterCard of banding together to stifle competition by
barring member banks from issuing American Express or Discover cards.
The
exchanges grew bitter and personal as the four executives testified less
than two weeks before the trial opened. American Express Co.’s chairman,
Harvey Golub said Visa and MasterCard operate “under the guise of two
names.” Phillip Purcell, chairman of Wall Street powerhouse Morgan
Stanley Dean Witter & Co., which owns the Discover card, called Visa
the “ringleader’’ of a joint effort to lock out smaller credit
cards.
“The
real Visa, not the benign image painted by its lawyers, operates on a
cloak of secrecy,’’ Purcell said at the hearing of the Senate Banking
Subcommittee on Financial Institutions. “Open up competition among the
card networks so that market forces, not the conspiratorial acts of two
dominant competitors, determine market success,’’ he pleaded.
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