A federal judge overseeing a pending $7.25-billion class-action settlement involving Visa and MasterCard ordered merchant trade groups opposed to the deal to show why they should not be held in contempt over a website blasting the accord, according to a Dow Jones report.
“The Merchantsobject.com site continues to this day to obfuscate the important differences between opting out and objecting” to the settlement, “and it fails to adequately inform a visitor to the site of the consequences of opting out,” Judge John Gleeson wrote in an order filed last week in U.S. District Court in Brooklyn.
Earlier this month, Judge Gleeson, who granted preliminary approval to the settlement in November, ordered the merchant trade groups behind the website and others to post a banner on the sites stating that information on the sites was misleading. He gave the trade groups until April 30 to show in writing why they should not be held in contempt of that order, which came after attorneys representing the proposed class of merchants in the case complained that the groups were using incorrect information on the sites to encourage retailers to opt out and object to the deal. A hearing on final approval of the settlement is scheduled for Sept. 12.
In last week’s order, Judge Gleeson also approved class plaintiffs’ request that banners be placed on the home pages of the websites in question, said the report. He also ordered that the trade associations provide notice to class plaintiffs’ counsel of any communications they intend to send out regarding the settlement. Oral arguments on the issue will be held May 3.
Although it does not indicate when the notice was posted, a notice on the Merchantsobject.com homepage now reads: “Notice: This is not the Court-approved case website. That website, the court-approved notice and other information about the case can be found at www.paymentcardsettlement.com.
This website is for merchants who are considering opposing the settlement. We urge you to express your opposition today. Let Visa and MasterCard know that your business won’t stand for this!
“On November 27, 2012, Judge John Gleeson of the United States District Court granted preliminary approval to a settlement in the case of In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation (MDL 1720). Unfortunately, the settlement is a bad deal for merchants. But don’t just take our word for it. You should review the settlement notice and relevant documents in the case and make your own decision.
Go to www.paymentcardsettlement.com for that information. Unfortunately, as you will see, the settlement would allow Visa and MasterCard to keep fixing fees in the future without limitation. Every business of any kind that has accepted a Visa or MasterCard credit or debit card for payment since January 1, 2004 is a member of the class of plaintiffs in this antitrust case. If you agree with this settlement, you do not need to do anything now. You can find information about submitting a claim at www.paymentcardsettlement.com. If you disagree with the settlement you can object to it and/or opt-out of it. Before making a decision to object and/or opt-out, please read the materials carefully on www.paymentcardsettlement.com along with the About the Case and FAQs on this site to fully understand the implications of those options.
“The Court has appointed the law firms of Robins, Kaplan, Miller & Ciresi LLP; Berger & Montague, PC; and Robbins Geller Rudman & Dowd LLP to represent the Class as Class Counsel. And to get both sides, you should also contact counsel for objectors, Constantine Cannon. But in our view, Class Counsel has not adequately represented the interests of merchants in the class. You can contact them with questions about the litigation, but we urge you to evaluate anything they tell you critically.”
The pending settlement would end litigation filed in 2005 by merchants and several trade groups against Visa, MasterCard, and several large banks that issue the payment networks’ credit cards. The plaintiffs alleged that Visa, MasterCard, and the banks conspire to set transaction fees that retailers pay at arbitrarily high levels. The merchants also alleged the defendants have limited their ability to drive down costs by forcing them to abide by rules that have prevented them from surcharging customers who pay with credit cards.
Under the settlement, announced last July, the defendants have proposed paying $6.05 billion to a class of eight million merchants and temporarily reducing interchange fees by an amount equal to $1.2 billion. Visa and MasterCard agreed to drop their bans on surcharging, a change that took effect in January. (CSP Daily News: www.cspnet.com)