Major US retailers blast Mastercard, Visa card fees settlement

By Mike Scarcella

April 29 (Reuters) - Target, Walmart, and other retailers have urged a U.S. judge to reject a proposed class-action settlement with Visa and Mastercard over credit and debit card fees, saying the accord does not go far enough.

The companies opposed the settlement in a series of filings on Friday in Brooklyn, New York, federal court, where Visa and Mastercard have battled claims since 2005 that they artificially inflated some fees on merchants in transactions involving consumers’ credit or debit cards.

The settlement with merchants, announced in March, would cap rates for card fees for five years and give sellers more authority to offer discounts based on the use of certain cards. Under current rules, merchants cannot “steer” customers to use cards with lower fees.

Visa and Mastercard denied any wrongdoing in agreeing to the settlement, which lawyers for the plaintiffs estimated will save merchants nearly $30 billion.

The retailers' objections tee up what is expected to be a major showdown over the fairness of the settlement, which requires court approval.

The objectors complained in their filings that Visa and Mastercard would be allowed to resume anticompetitive practices after a five-year pause. Some retailers called the accord’s purported benefits “illusory.”

Walmart in its filing said small local merchants “traded away the interests of large national merchants for relief that is worthless to the members with the most at stake in this litigation.”

Target argued that the proposed settlement “would provide cover for a naked price-fixing agreement between Visa and Mastercard” if it is approved.

The National Retail Federation called the agreed rate reduction a “drop in the bucket,” saving merchants some $6 billion a year. The industry group said Visa and Mastercard’s credit card fees were $100 billion last year.

A preliminary hearing on the settlement is scheduled for June 13.

In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, U.S. District Court, Eastern District of New York, No. 1:05-md-01720.

Read more:

US Supreme Court declines Visa, Mastercard appeal in ATM class action

Visa, Mastercard reach $30 billion settlement over credit card fees

Visa, MasterCard $5.6 bln settlement with retailers is upheld

(Reporting by Mike Scarcella)

((Mike.Scarcella@thomsonreuters.com;))