The Second Circuit Court of Appeals today overturned the class-action settlement in the case In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. That case led to a proposed settlement valued at $7.25 billion in 2012. Today’s ruling called the settlement “unreasonable and inadequate.”
NACS led efforts to oppose the $7.25 billion proposed settlement, which when it was announced in July 2012 was the largest antitrust settlement in U.S. history, because the relief it offered was inadequate and the release was overly broad.
The proposed settlement required 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.
In addition to opposition from NACS, the proposed settlement was opposed by the majority of named plaintiffs and approximately 1,200 additional merchants and retailer groups filed papers objecting to preliminary approval of the proposed settlement.
The convenience store industry has credit card fees of $10.0 billion, according to the recently released NACS State of the Industry Report of 2015 Data.
“We are pleased that the Second Circuit Court of Appeals has thoughtfully addressed the problems we have long identified with this proposed settlement. We will work to help ensure that this moves forward in a way that recognizes the best interests of merchants and the consumers they serve,” said NACS President and CEO Henry Armour.
NACS published answers to common questions related to the proposed settlement in May 2016 and will update the resource as more facts become known in the case. Look for future updates in NACS Daily.