The Second Circuit’s ruling that the settlement did not sufficiently protect the interests of some merchants will stand
BY NACS ONLINE
Recently, the nation’s highest court declined to hear appeals from Visa, MasterCard and certain retailers to reinstate a $5.7 billion antitrust settlement over whether the card networks unfairly fixed interchange fees. The decision means the Second Circuit’s ruling that the settlement did not sufficiently protect the interests of some merchants will stand, allowing current lawsuits to proceed.
The settlement, one of the largest in history, was approved by Judge Gleeson of the Eastern District of New York in December 2013 over the objections of thousands of retailers, including NACS and many of its members.
Those retailers opposed the settlement because accepting it would have ended the case and permitted Visa, MasterCard and the banks to continue to price-fix swipe fees and to use rules to block competition in the payment card market. In other words, the settlement would have done nothing to fix the antitrust problems with credit and debit cards.
The Court’s decision ensures that retailers will continue to be able to challenge the card networks’ unfair price fixing of credit card fees. If the justices had come down in favor of the settlement, the card companies would have been insulated from lawsuits challenging improperly set fees.