Mastercard, Visa and several U.S. banks agreed Tuesday to a $6.2 billion settlement over a long-standing antitrust lawsuit that merchants had brought over credit card swipe fees. The settlement is still awaiting court approval in the Eastern District of New York.
The class action lawsuit was initially introduced on behalf of 12 million retailers in 2005. The credit card companies have paid $5.3 billion as a result of a 2012 settlement for $7.25 billion and are now slated to pay an additional $900 million. In total, Visa will pay $4.1 billion and Mastercard will pay $898 million, according to The Wall Street Journal.
The National Retail Federation and the Retail Industry Leaders Association have snapped back against the proposed settlement, arguing in press releases that the money doesn’t fix a “broken payment ecosystem” and that consumers will still be the ones who ultimately pay more.
Retailers have been fighting the swipe fee fight for over a decade now. And they’re still not happy.
“The monetary settlement doesn’t solve the problem. Swipe fees cost retailers and their customers tens of billions of dollars a year and have been skyrocketing for nearly two decades,” NRF Senior Vice President and General Counsel Stephanie Martz said in a press release. “Ending the practices that lead to these anticompetitive fees is the only way to give merchants and consumers full relief once and for all.”
According to the NRF, merchants who accept the new settlement would be banned on suits against the companies for the next five years as opposed to the permanent ban on future swipe fee lawsuits mandated in the previous settlement. Martz said credit card swipe fees ultimately cost consumers hundreds of dollars a year.
In 2014, the NRF asked the 2nd U.S. Circuit Court of Appeals to overturn its 2014 settlement. In 2016, it did. That ruling, however, was appealed to the Supreme Court, which did not take up the case last year.
Deborah White, RILA senior executive vice president and general counsel, and president of the Retail Litigation Center, said in a press release that the settlement offers “only pennies on the dollar for the harms that they suffered as a result of the anti-competitive rules backed by the card networks and big backs.”
“More importantly, the proposal does not provide for any changes in those rules — and would limit the ability to pursue meaningful change of the rules that the payments card cartel will install to govern the payment ecosystem in the future,” White added.
In June, the Supreme Court in a narrow 5-4 ruling sided with American Express on a separate swipe fees case that industry experts characterized as a major loss for the retail industry.