The U.S. Justice Department is taking over a Federal Trade Commission investigation into whether the world's two leading credit-card companies illegally require merchants to honor their debit cards.
The FTC said it was closing its debit-card investigation of Visa U.S.A. Inc. and MasterCard International Inc. and sending the files to the Justice Department, which is already investigating the debit-card industry.
The Justice Department has also accused the two credit-card issuers of stifling competition in a separate antitrust case scheduled for trial next year.
The FTC's referral leaves it up to the Justice Department to decide whether Visa and MasterCard are violating antitrust laws by requiring merchants that honor their credit cards to also accept payments for goods with their debit cards.
The FTC also referred to Justice allegations that Visa was preventing consumers from using its new "on-line" debit card to make purchases through rival debit-card networks. The new debit-card, which was introduced last fall, lets consumers buy goods and deduct the cost electronically from their bank accounts by punching an identification number into terminals installed in stores, supermarkets and gas stations.
Manufacturing continues to decline
NEW YORK (AP) -- Manufacturing activity continued to decline in January, but at a slower rate than in the last seven months, as global economic turmoil failed to crimp production and new orders.
The National Association of Purchasing Management reported today its monthly index of business activity rose to 49.5 percent last month from 45.3 in December -- its lowest level since May 1991. The increase was bigger than economists had forecast, but any reading under 50 percent is a sign of contraction in the industrial sector.
While industrial activity has yet to snap its decline, the group said the overall economy continued to grow for a 93rd straight month.
The private group's report is compiled from a survey of corporate purchasing executives nationwide. It is widely followed by economists because it is usually the first indicator of how the economy performed in the previous month.
Xerox faces $250 million lawsuit
WASHINGTON (Bloomberg) -- Xerox Corp., the world's largest copier maker, said it has been sued for $250 million by employees at a former company insurance unit who say their savings plan benefits were cut off illegally.
The class-action lawsuit, disclosed in a filing with the U.S. Securities and Exchange Commission, was brought on behalf of 10,000 people who worked at Xerox's Crum & Forster Holdings Inc. division, an insurance unit sold to Fairfax Financial Holdings Ltd. in 1998. Three former Crum & Forster employees filed the suit, according to the SEC document.
"Plaintiffs purport to bring this action on behalf of themselves and a class of approximately 10,000 persons who were employed" by Crum & Forster or one of its insurance subsidiaries that also participated in the employee stock ownership plan from July 1, 1989 through Dec. 31, 1993, according to the SEC filing.
Xerox said in its SEC filing it "denies any wrongdoing and intends to vigorously defend" against the suit and a related one filed earlier last year in federal court in Texas. The Texas suit did not specify what damages are being sought.
This week in business
Here are the major business and economic events scheduled for this week:
Tuesday -- The Federal Reserve's Open Market Committee begins two-day meeting to review interest rates; Ford Motor Co. and DaimlerChrysler will announce their sales figures for January; the Conference Board will issue a report on Leading Economic Indicators for December, and the Commerce Department will release data on new home sales for December.
Wednesday -- General Motors Corp. will announce its sales figures for January.
Thursday -- The nation's largest retailers will announce their sales figures for January; the Labor Department will release weekly jobless claims; the Commerce Department will report on factory orders for December, and the Federal Reserve will release minutes of its December open market committee meeting.
Friday -- The Labor Department will releases unemployment figures for January and the' Federal Reserve will report on consumer credit for December.