NEW YORK The Retail Industry Leaders Association, which represents retail giants including Walmart Stores, Target and Home Depot, on Wednesday said it will not endorse the proposed $7.2-billion antitrust settlement with Visa and MasterCard, adding a major foe to the deal.
Calling the proposed settlement a “bad deal” for nearly 8 million U.S. merchants, the group said it intends to “make a statement” by opting out of the historic antitrust settlement just as lead lawyers for the plaintiffs and credit card companies are preparing to file papers seeking final approval from a federal judge in New York. Many of the group’s biggest members already have expressed opposition to the deal on their own.
The move could prompt a new round of criticism of the deal from large U.S. retailers and possibly more opt-outs. Hundreds of small merchants have filed their opposition to the settlement with the court, which has lent preliminary approval to the deal. A high number of opponents could persuade the judge to reject final approval.
The proposed settlement, announced last year, would resolve an eight-year-old lawsuit on behalf of U.S. merchants accusing Visa and MasterCard of artificially raising interchange, or swipe, fees, which are paid to process credit card transactions. The settlement includes a $6.05-billion payment and $1.2 billion in temporary swipe fee reductions, as well as changes to Visa and MasterCard rules to allow merchants to charge customers extra for using certain cards.
Almost 8 million stores, restaurants and other merchants that accept credit cards have been given until May 28 to opt out or object to the deal.
If merchants opt out, they will not be eligible to receive a portion of the monetary damages. But they note that they will be bound by parts of the settlement that would prohibit them from suing Visa and MasterCard over similar interchange issues in the future, if the settlement is approved.
The retail group said it believes the litigation releases in the settlement will force merchants to forego future legal claims against Visa and MasterCard in exchange for “paltry” monetary relief over years of harm from swipe fees, which have cost merchants billions of dollars. RILA is among the first major trade groups to come out against the deal, which drew a flurry of opposition at the preliminary approval stage last year. The National Grocers Association said in February that it would opt out, and urged its members to do the same.
