NEW YORK Major merchants groups called on a federal court here today to amend or reject a proposed antitrust settlement with Visa and MasterCard over swipe fees, or asked the judge to at least allow unwilling participants to opt out.
“The proposed settlement is next to worthless,” said Mallory Duncan, general counsel for the National Retail Federation. “It does nothing to reduce swipe fees or keep them from rising in the future, it offers retailers pennies on the dollar for the damage that has already been done, and it tries to tie merchants’ hands from ever suing again. This is actually worse than no settlement at all because it further entrenches the monopoly held by the card companies.”
The head of the National Association of Convenience Stores, another opponent, said the $7.2 billion settlement does little to change the current market dominance of the two card networks and hamstrings its members because it would bar them from seeking additional legal recourse against Visa and MasterCard.
“The primary rules relief in the settlement, surcharging, is completely unworkable because of negative consumer reactions to surcharging, state laws that prohibit it, and the level-the-playing field provisions,” said Henry Amour, chief executive of NACS, which succeeded in getting a federal court to overturn the Federal Reserve’s Durbin amendment cap on debit fees as too high. “Most telling is the fact that since February when retailers have had the ability to surcharge under the settlement there has been virtually no movement in that direction. That is compelling evidence that the ability to surcharge has no value to the class.
“Further this settlement has the potential to make things much worse by giving the Defendants an incredibly broad release of claims for future bad conduct," said Amour.
Judge John Gleeson issued preliminary approval to the deal last November and dismissed the same objections. But since then, hundreds of merchants and their organizations have weighed in against the settlement.
It is not clear when the Judge will issue a final ruling.
