Visa Settles AmEx Suit

Visa agreed to settle a long-running legal dispute with American Express(AXP Quote) by agreeing to pay up to $2.25 billion to the New York card and travel services giant.

American Express had sued Visa, MasterCard(MA Quote) and several member banks -- namely U.S. Bancorp(USB Quote), Wells Fargo(WFC Quote), Washington Mutual(WM Quote), JPMorgan Chase(JPM Quote) and Capital One(COF Quote) -- in 2004 for allegedly blocking it from entering the bank-issued credit card business in the U.S.

The suit, filed in the U.S. District Court in Manhattan, sought monetary damages for "lost business opportunity that resulted from the illegal conspiracy to boycott American Express," the card company said.

MasterCard remains the sole defendant in the case. A spokesman did not immediately return a call seeking comment.

"The size of this settlement, along with earlier court rulings, underscores the seriousness of the damage done by the illegal boycott," said Kenneth Chenault, chairman and chief executive of American Express. "We plan to move forward with the litigation to hold MasterCard accountable for the illegal actions that blocked banks from working with us for many years and to seek full compensation for the value that would have been generated for our shareholders."

Under terms of the agreement, Visa agreed to pay American Express a maximum of $2.25 billion. American Express will receive an upfront payment from Visa and the member banks of up to $1.13 billion. The remainder will be paid in installments of $70 million a quarter over the next four years.