Wednesday, May 21, 2003


Internet Payment Service Provider Claims MasterCard’s Policies Violate Antitrust Law

May 21, 2003

MasterCard International, Inc. is exercising its power in the payment card market in violation of federal antitrust law, according to a complaint filed May 12 in the U.S. District Court for the Central District of California. Paycom Billing Services, Inc. v. MasterCard International, Inc. (Complaint), 2003 ILRWeb (P&F) 1806 [CD Cal, 2003].

The plaintiff, an Internet payment services provider, alleged that MasterCard’s policies regarding chargebacks and extra fines fees for certain providers constitute a conspiracy in restraint of trade and monopolization in violation of the Sherman Antitrust Act.

Paycom Billing Services, Inc. of Marina del Rey, California, which does business as Paycom.net, Epoch Transaction Services, Epoch Systems, and Paycom, Inc., acts as a payment service for consumers buying goods and services from a variety of web sites. According to the complaint, about 40 percent of the payments processed by Paycom are made through MasterCard-associated cards.

The complaint alleged that MasterCard’s policies regarding chargebacks, which are made when a card holder claims that a charge made to the card account was unauthorized or otherwise illegitimate, puts all the risk of loss on Paycom. Furthermore, MasterCard has instituted a system of penalties for merchants whose share of transactions that result in chargebacks exceeds a certain threshold. Paycom claimed that these penalties are imposed even in periods when its chargeback rate does not exceed the threshold.

Meanwhile, according to the complaint, MasterCard’s own policies have hindered Paycom from identifying beforehand what credit card transactions might be fraudulent, for example, by withholding a list of credit card numbers that had been stolen.

Paycom Must Accept MasterCard Cards. Paycom claimed that it must accede to such actions because it cannot remain in business if it cannot complete transactions made through MasterCard-branded cards. If it refused to accept such cards, then the web sites that are its clients would find alternative means to complete transactions.

Furthermore, the complaint stated that MasterCard is using its market power in the payment card market to pressure Paycom to change its business model.

Paycom alleged these actions amount to a contract or conspiracy in restraint of trade under the Sherman Antitrust Act §1. According to the complaint, MasterCard’s policies “have unreasonably restrained competition in the general payment card market by ... improper and illegal means ... , which resulted in an unreasonable restraint on competition.” Furthermore, MasterCard’s imposition of “perpetual fines and penalties” have an effect of creating a boycott of Paycom.

The second claim for relief alleged illegal creation, enhancement, and maintenance of a monopoly in the general payment card market under the Sherman Act §2.

The complaint also alleged violations of the Robinson-Patman Act and the California Cartwright Act. There were also claims for denial of fair procedure, unfair competition, breach of contract, breach of implied covenant, intentional interference with contractual relations, intentional interference with prospective business and economic advantage, negligent interference with actual and prospective business and economic advantage, and fraud.

The plaintiff asked for declaratory and injunctive relief prohibiting the imposition of the fines and penalties for chargebacks, actual damages in excess of $3 million, and exemplary damages of $20 million.

The plaintiff was represented by Richard P. Crane Jr. William McD. Miller, and Dennis M. P. Ehling of Music, Peeler & Garrett, Los Angeles.

Copyright © 2003 by Pike & Fischer, Inc., a subsidiary of The Bureau of National Affairs, Inc.

Tuesday, May 13, 2003

Fitch offers an intra-day trading report for stocks. The report shows each transaction on the stock during the day. The cost for each day is $35, and they require an email with a credit card number. You need to provide the ticker, and the exchange would not hurt either.

Email is stocklist@fitchgroup.com.

LITTLE-KNOWN OBLIGATIONS


Where Do Your Time and Money Go?

BY THE RODENT

Most people coming out of law school are uninformed about the hidden obligations that go along with being a lawyer. These obligations, new lawyers should know, will significantly strain your calendars and wallets. These matters should be factored in when calculating your salary and billable-hour responsibilities.

1. First of all, you can expect that 20 to 30 percent of your time will be taken up with pro bono activities. And I’m not talking about the pro bono work for worthy causes that you were told about during your interview with The Firm. I’m talking about the free-of-charge legal work you will perform on behalf of family members, distant family members, friends, friends of friends, and friends of distant family members. Also, expect to get a steady supply of assignments from co-workers—and their friends. Within days of being sworn in, you will hear from these people, all of whom will assume that you know the answers to their legal questions. Unfortunately, their issues never seem to involve easy answers. Nor do they ever seem to involve retainer agreements.

2. Be prepared to watch a good 10 to 20 percent of your income go toward the purchase of cookies, candy, raffle tickets and the like sold by secretaries, paralegals and other lawyers who will come to you on behalf of their favorite charities. And remember, you must buy more than one of whatever they are selling. When you are told that "Jim in the mailroom bought three of these," the implication is that you should buy at least twice as many. Buying just one—or none—will make you the topic of discussion in The Firm’s lunchroom.

3. A certain percentage of your time will be spent listening to the same stale lawyer jokes over and over and over again. I can even tell you which jokes. First, there’s the one about what you call a group of lawyers chained together on the bottom of the ocean. Then there’s the one about the lawyer at St. Peter’s gate. When the lawyer complains that it is not yet his time, he is told that according to his timesheets ... you know the punch line. Worse than the jokes themselves is the further obligation to pretend like you’re hearing them for the first time. Ironically, the most common tellers of these jokes are the people mentioned above who come to you for free legal advice. Presumably, they think the jokes take the place of what you usually charge for your services.

4. You will be obligated to attend a whole array of social gatherings that you’d really rather miss. Depending on the firm you work at, this can amount to as much as one-third of your time. These events range from office cocktail parties, pool parties for the summer associates, ball games with clients and baby showers for your secretary. One good thing about the baby showers, however, is that you can give the kid those same items you purchased from co-workers. Infants love Girl Scout thin mint cookies!

When all is said and done, you will have two to three hours a day of your time left and about half of your salary.

How will you manage? I’ll answer that question in two of my upcoming columns. One is entitled "Weekending at The Firm." The other is "How to Become a Millionaire Using Your Law Firm’s Fax Machine."

You can contact the Rodent at TheRodent@aol.com.

©2003 ABA Journal

Tuesday, May 06, 2003

Here are this week's updates to the HBS Working Knowledge site, http://hbswk.hbs.edu/.
Please feel free to forward this information to friends or business associates.
Career Effectiveness
Sharpen Your Job Interview Skills
http://hbswk.hbs.edu/pubitem.jhtml?id=3460&t=career_effectiveness
The keys to winning a job interview are to establish trust and communicate the skills you'll bring to your next employer. Nick Morgan explains.