Inside This Issue - News
Swipe fee settlement clears hurdle
November 26th, 2012
WASHINGTON – Despite objections from hundreds of retailers, a federal judge has preliminarily approved a $7.2 billion settlement of a class-action lawsuit over so-called swipe fees.
If the deal gets final approval from U.S. District Court Judge John Gleeson, it will be the largest federal antitrust settlement in the country’s history. Under the terms of the deal Visa and MasterCard would amend their no-surcharge policies, letting retailers charge shoppers extra for paying by credit or debit cards.
The $7.2 billion would be distributed to nearly 8 million merchants, but retailers will be barred from filing future lawsuits over the fees.
Lawyers for companies opposed to the deal, including Target Corp. and Home Depot Inc., told Gleeson at a hearing that it offered meaningless relief for retailers paying $30 billion in annual swipe fees.
The National Retail Federation (NRF) has vowed to explore all legal options to block the settlement. "The proposal pending before the court does nothing to keep these soaring fees from continuing to drive prices higher for American consumers, and would block merchants who believe in true swipe fee reform from ever having their day in court," NRF senior vice president and general counsel Mallory Duncan said. "While the remaining parties would like to treat preliminary approval as a routine procedural step, the court should recognize that this settlement is so legally flawed it cannot be tweaked into fairness.
"We question whose interests are being served here — merchants and their customers or the card companies and lawyers," he added. "Instead of improving the situation, the proposed settlement would cast in stone the very problems that need to be fixed."