A majority of the named plaintiffs representing the class of all merchants in the case of “In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation” have announced their opposition to the proposed antitrust settlement agreement with Visa, MasterCard, and some of the nation’s largest banks.
The plaintiffs object to the proposed settlement that will be filed today because, rather than reforming the anticompetitive and illegal practices engaged in by the credit card industry, it will allow that industry to continue to take advantage of merchants and their customers while blocking competition and choice. In addition to the challenges for merchants, consumers struggling to pay for the basics need relief. Over the last seven years, merchants and ultimately consumers have been charged $350 billion in swipe fees by the card companies.
The named plaintiffs have been joined by a growing chorus of members of the merchant class. The associations opposing the proposed settlement represent hundreds of thousands of stores with trillions of dollars in sales, which is a demonstration of the fundamental problems with the proposal.
“The people asking the court to approve the proposed settlement simply do not represent the interests of most merchants, we do,” said Henry Armour, president and CEO of NACS. “The proposal represents a minority view and must be rejected.”
“On behalf of our members and the consumers they serve, we will continue to pursue our rights and fight for reform of the excessive anticompetitive credit card fees and oppressive rules that are being imposed on all merchants,” said Peter J. Larkin, president and CEO of NGA.
“There is strong concern among our member companies that the proposed settlement will not achieve the litigation’s most critical goal — to fundamentally change a broken marketplace in which swipe fees are set,” said Dawn Sweeney, president and CEO for the National Restaurant Association. “We don’t expect any settlement to address every flaw of the current system, but we cannot allow it to lock in the worst elements.”
“This proposed settlement not only enables continued centralized price-fixing by Visa and MasterCard, but it prevents all current and future merchants—even those that are not yet in existence—from challenging actions in the future,” said B. Douglas Hoey, CEO of NCPA. “That is simply unfair.”
The proposal will also hamper the potential for cutting edge technology to reduce payment card costs. The proposed settlement would apply to mobile payments and would open the door for Visa and MasterCard to use anticompetitive means to dominate that market and block competition from new entrants in the market.
“We have a responsibility to represent all U.S. merchants and a settlement that cuts off the best chance for the market to help deal with swipe fees and mobile payments cannot be allowed to go forward,” said Robynn Shrader, CEO of NCGA.
“The proposed settlement is a bad deal that does not represent the best interest of merchants and their customers, further entrenches the anticompetitive practices of the Visa and MasterCard duopoly, and denies merchants their legal right to fight for real changes in court,” said Lisa Mullings President and CEO of NATSO. (NACS: www.nacsonline.com)