Many MIRA members received a Settlement Notice regarding the MasterCard/VISA lawsuit settlement. In fact, all retailers who accepted VISA and/or MasterCard at any time between January 1, 2004, and November 27, 2012, are affected by the proposal. The notice requires each individual to take action to object and/or opt-out before the May 28 deadline.
After analyzing the factors addressed in the settlement, MIRA—along with other regional and national associations—suggests members consider opting-out and objecting to the settlement.
By objecting or opting-out, you give up the cash settlement initially provided for in the settlement agreement. But you maintain your ability to object to the proposed settlement agreement, and you could limit the range of fees that MasterCard/VISA could charge you in the future.
If you choose to accept the cash offer defined in the settlement, you will receive the equivalent of approximately two months of credit card fees at your store, but you will be waiving your right to object to any future “swipe-fee” and/or “transaction fee” increases imposed by MasterCard/VISA.
Take Action Now
NACS believes the settlement is a bad deal for retailers and has launched a website to help retailers from all channels express their opposition to the proposed credit card swipe fee settlement. The site, merchantsobject.com, provides the tools for all retailers affected by the proposed settlement to express their opposition by opting out and objecting to the proposal via electronic signature. The documents are automatically forwarded to NACS’ law firm, Constantine Cannon, where they will be printed and submitted to the Court. Retailer opposition to the proposed settlement will be taken into account when U.S. Court of Appeals for the Second Court holds a hearing in September.
Background
On July 13, 2012, a proposed settlement was announced between the plaintiff class of merchants, of which you are a member, and the defendants (VISA, MasterCard and several banks) in In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation (MDL 1720).
Approximately 8 million retailers overall received notices about the proposed settlement and they have until May 28, 2013, to opt-out and object to it. If you accepted VISA and/or MasterCard at any time between January 1, 2004, and November 27, 2012, you will need to decide whether to opt out, object to, or accept the settlement. Even if you submitted a declaration objecting to the proposed settlement last fall, you will need to respond to the notice and submit something in writing again if you want to opt-out of or object to the proposed settlement. If a retailer doesn’t meet that deadline, the court will assume that retailer accepts the proposed settlement in full.
The proposed settlement offers class members money damages of about two months’ worth of interchange and, among other things, limited modifications to VISA’s and MasterCard’s surcharging rules. However, there are no fundamental market changes that would constrain VISA and MasterCard from continuing to raise rates and the proposed settlement does not change the two fundamental problems with the current swipe fee system:
- VISA and MasterCard fix the rates for their banks so that banks don’t compete on price.
- VISA and MasterCard police merchants to make sure the fees stay hidden so that there are no competitive market forces.
The proposed settlement requires class members to release VISA and MasterCard from liability—forever—for any anticompetitive rules currently in place (including the interchange or swipe fee rules) and/or any “substantially similar rules” instituted at any time in the future. And, while the release from merchants lasts forever, the meager changes that VISA and MasterCard will make to their rules end in 2021.
