Retailers unhappy with swipe fees settlement, saying it doesn’t go far enough
It is the largest-ever class-action settlement of a U.S. antitrust case.
Visa Inc., MasterCard Inc. and several U.S. banks have agreed to pay up to $6.2-billion settlement to settle a long-running class-action with U.S. retailers over swipe-fees. The agreement, which still must be approved by the court, is the latest development in an antitrust lawsuit brought by a group of small retailers over swipe fees that dates back to 2005. The lawsuit accuses the credit card companies of violating federal antitrust laws by forcing merchants to pay swipe fees and prohibiting them from directing consumers toward other methods of payment.
Visa and MasterCard previously reached a $7.25 billion settlement with the merchants in the case. But the deal was thrown out by a federal appeals court in 2016. It found the deal was unfair because some retailers would receive little or no benefit.
Retail associations say the new agreement does not goes far enough in that it fails to address efforts to change network rules.
“The monetary settlement doesn’t solve the problem,” said Stephanie Martz, senior VP and general counsel for the National Retail Federation. “Swipe fees cost retailers and their customers tens of billions of dollars a year and have been skyrocketing for nearly two decades. Ending the practices that lead to these anticompetitive fees is the only way to give merchants and consumers full relief once and for all.”
The Retail Industry Leaders Association and Retail Litigation Center called the proposed settlement “another symptom of our nation’s broken payment ecosystem.”
“It still offers merchants only pennies on the dollar for the harms that they suffered as a result of the anti-competitive rules backed by the card networks and big banks,” said Deborah White, RILA senior executive VP and president of RLC. “More importantly, the proposal does not provide for any changes in those rules — and would limit the ability to pursue meaningful change of the rules that the payments card cartel will install to govern the payment ecosystem in the future.”
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