Yahoo Finance Visa, Mastercard $30 billion fee settlement in peril
NEW YORK (Reuters) — Visa's and Mastercard's proposed $30 billion antitrust settlement to limit credit and debit card fees for merchants is in peril, after a New York judge signaled she was preparing to reject the accord.
U.S. District Judge Margo Brodie in Brooklyn told lawyers for the card networks and objectors at a hearing on Thursday that she will "likely not approve the settlement," according to court records.
She plans to write an opinion explaining her decision and reasoning.
Both card networks said they were disappointed. Mastercard called the settlement a "fair resolution" that gave businesses more flexibility in managing card transactions, and Visa called it an "appropriate resolution" to the nearly 19-year-old case.
The settlement announced on March 26 was intended to resolve most claims in the nationwide litigation, with small businesses comprising more than 90% of the settling merchants.
Businesses have long complained that Visa and Mastercard charge excessive swipe fees, or interchange fees, for processing credit and debt card payments, and illegally bar them from steering customers toward cheaper forms of payment.
Swipe fees totaled $172 billion in 2023, and have more than doubled in the last decade, according to the Merchants Payments Coalition, which represents retailers, grocers, convenience stores and gas stations.
Under the settlement, the average 1.5% to 3.5% swipe fee would fall by at least 0.04 percentage points for three years. Visa and Mastercard also agreed to cap rates for five years and remove anti-steering provisions.
Objectors included the National Retail Federation, the world's largest retailer trade group.
It called the settlement "manifestly insufficient" and its benefits "meager and temporary," saying it would still let Visa and Mastercard dictate swipe fees, and impose a "virtually limitless" ban on future claims by merchants.
The case is In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, U.S. District Court, Eastern District of New York, No 05-md-01720.
(Reporting by Jonathan Stempel in New York; Editing by Diane Craft)
