Visa and Mastercard Settle Antitrust Suit with US Merchants
🔃 Update (Jun 26, 2024) – U.S. District Judge Margo Brodie in Brooklyn rejected the $30 billion antitrust settlement, as reported be Reuters. Many merchants and trade groups including the National Retail Federation opposed the accord, saying card fees would remain too high, while Visa and Mastercard would retain too much control over card transactions. The decision could force Visa and Mastercard to negotiate a settlement more favorable to merchants, or go to trial.
🔃 Update (Jun 14, 2024) – The $30 billion settlement is likely to be rejected by a federal judge in Brooklyn. Judge Margo Brodie of the US District Court of the Eastern District of New York indicated in a hearing Thursday that she probably won’t approve the deal, according to court records. Brodie will “issue a written decision” in coming days as reported by Bloomberg.
➡️ Original article (Mar 26, 2024) – Visa Mastercard have agreed to cap credit-card swipe fees, a move that US merchants say will save them at least $30 billion over five years. The landmark settlement with U.S. merchants comes after almost two decades of litigation.
Visa and Mastercard say they will lower published credit-card interchange fees by four basis points in the U.S. for at least three years. The companies also won’t raise interchange fees for five years above the rates that were in place at the end of 2023, as reported by Bloomberg. That means that the two companies will cap the credit interchange fees into 2030.
The deal, which is subject to court approval, also would allow retailers to charge consumers extra at checkout for using Visa or Mastercard credit cards and use pricing tactics to steer customers to lower-cost cards, according to a statement Tuesday from attorneys representing the merchants.
The settlement stems from a 2005 lawsuit which alleged that merchants paid excessive fees to accept Visa and Mastercard credit cards, and that Visa and Mastercard and their member banks acted in violation of antitrust laws.
In 2018 Visa and Mastercard agreed to pay $6.2 billion as part of the long-running suit filed by a group of 19 merchants. But the lawsuit still left out the dispute over the rules Visa and Mastercard impose to accept their cards, and the merchants who chose not to participate in the settlement.
