In response to U.S. District Court Judge John Gleeson’s approval of an antitrust lawsuit regarding credit card swipe fees, retailer trade associations expressed their disappointment, with the National Retail Federation (NRF) referring to the settlement as “deeply flawed.”
Mallory Duncan, SVP and general counsel at Washington, D.C.-based NRF, said that the settlement “is not supported by the retail industry and would do nothing to reduce swipe fees or keep them from rising in the future.” Duncan added: “The settlement permanently ties the hands of thousands of businesses [that] wanted nothing to do with this misguided case, and a decision to approve it violates established law and common sense. We are reviewing the ruling and will take whatever steps are necessary to protect the rights of merchants and safeguard the pocketbooks of their customers.”
"The retail community remains committed to fighting [the] settlement and addressing the fundamental lack of competition in the electronic payments market," asserted Deborah White, EVP and general counsel for the Arlington, Va.-based Retail Industry Leaders Association (RILA). "Quite simply, the proposed settlement undermines merchants' legal rights forever and fails to restrain Visa's and MasterCard's ability to impose higher and higher swipe fees with impunity."
Skyrocketing Swipe Fees
NRF advised against approving the settlement at a hearing in September. According to the trade association, credit card swipe fees cost retailers and shoppers approximately $30 billion annually and have tripled over the past decade.
RILA maintains that the settlement is unacceptable because it locks in what the organization calls "the Visa/MasterCard duopoly"; offers no relief from swipe fee setting and other rules; prevents all present and future retailers from bringing future lawsuits against Visa, MasterCard or the banks; and could limit such emerging innovations as mobile payments, which could introduced "meaningful competition to the marketplace."
The $5.7 billion settlement, which has brought to a close years of class-action litigation pitting U.S. retailers against credit card giants Visa and MasterCard, is estimated to be the largest ever in a U.S. antitrust case, Bloomberg News reported.