Washington, D.C. -- A revised antitrust settlement on the issue of credit card swipe fees doesn't go far enough, The National Retail Federation said Friday.
“The proposal put on the table this summer was beyond tweaking, and the update presented today proves that fact. It remains manifestly unfair,” NRF senior VP and general counsel Mallory Duncan said. “The settlement still does virtually nothing to protect retailers or their customers from the abuses of the card industry, and it attempts to silence any objections for years to come. Retailers would rather take their chances in court than accept this one-sided swindle written by the card industry for the card industry.”
Moreover, added Duncan, the lawyers and handful of retailers who support the settlement “do not represent the retail industry.”
Lawyers representing 13 individual retailers and six trade associations ranging from convenience stores to restaurants this summer announced a $7.25 billion proposed settlement of a lawsuit filed against Visa and MasterCard in 2005. But four of the individual companies and all six of the trade associations have rejected the proposal since then.
A revised version of the settlement was filed in U.S. District Court in Brooklyn Friday, and opponents are expected to have 30 days to voice their objections to the deal.
NRF said it opposes the settlement because it does little to address high fees charged in the past and nothing to prevent them from rising higher in the future. The $7.25 billion figure represents less than three months’ worth of swipe fee collections despite the eight-year period of the lawsuit, and the settlement fails to reform the cartel-like system where Visa and MasterCard set a rigid schedule of swipe fees all banks agree to follow while refusing to negotiate with merchants. The proposal does nothing to disclose the hidden fees or otherwise create transparency that would encourage competition. And retailers would face a long-term ban on future lawsuits over swipe fees, effectively allowing card industry practices to continue unchallenged.