NEW YORK Seeking to salvage its landmark antitrust settlement, Visa filed suit yesterday in federal court here seeking a declaratory judgment that would prevent Walmart from bringing price-fixing claims over merchant credit card fees.
The retail giant has been fighting Visa and MasterCard for a decade over swipe fees and is among more than 7,000 retailers that have dropped out of the $7.2 billion antitrust settlement with the card networks over credit card fees. In the latest legal salvo, Visa said it wants to prevent “the continuation of endless, wasteful litigation between the parties.”
“Put simply, Visa seeks finality in its dispute with Wal-Mart,” the card company said in the new suit, filed in U.S. District Court for the Eastern District of New York, which is reviewing the landmark settlement.
The battle affects credit unions two ways. First, because they are shareholders in both Visa and MasterCard and their shares have been used to finance the networks’ settlement funds. And second because any diminution of profits by the card networks trickle down to Visa’s and MasterCard’s credit union and bank partners, mostly through higher fees.
Walmart and the other merchants that dropped out of the settlement have an option to pursue their own lawsuits over the fees. Visa said in its complaint that Walmart “has made plain” that it will file a new lawsuit.
The retailers say the proposed antitrust deal does not go far enough and does not pay them enough damages for the years of alleged price-fixing. They also object to a clause in the settlement that would prevent them from pursuing other claims against the card networks.
MasterCard officials said last week they believe they have enough votes by affected plaintiffs, amounting to 25% of the credit card transactions involved, to forge final approval of the deal, which must be certified by a federal judge. A hearing on final approval for the settlement is scheduled for September 12.
Walmart, which has been the leading opponent of the card networks, expressed frustration with the new Visa suit. “We are disappointed that Visa chose to file this unwarranted and unsupportable lawsuit in retaliation for our decision to opt out and object to an unfair settlement agreement,” the company said in a statement. “The proposed settlement would low credit card companies and big banks to perpetuate a broken system that costs consumers billions of dollars each year.”
