US: Retail groups officially request swipe-fee settlement rejection

A controversial settlement offered by Visa and MasterCard to retailers that sued the companies over swipe-fees is now being challenged as the National Retail federation and the Retail Industry leaders Association has asked an appeals court to overturn the settlement’s approval.

According to reports, the retail groups opposed of the $5.7 billion settlement and vowed to appeal it after US District Judge John Gleeson approved the offer last December. Some of the nation’s largest retailers, including Wal-Mart, Amazon, Target and thousands of other stores, opted-out of the settlement offer on the grounds that it did not adequately address the concerns of swipe-fees.

Retailers first filed the suit against the credit card companies in 2005 over the fees, also known as interchange fees, that are charged by credit card issuers to the retailers every time a credit card is swiped.

The merchant groups filed notices of appeal earlier this year with the 2nd US Circuit Court of Appeals. On Monday, the groups filed a joint brief formally requesting that the appeals court overturn the settlement’s approval.

In that brief, the NRF and RILA claimed legal error in the settlement’s approval, noting that 19 percent of retailers by credit card volume formally objected to the settlement offer, while 25 percent of those retailers opted out. The settlement would only amount to a small percentage of returns on the charged fees, the merchant groups said, and its judiciary approval did not accurately balance monetary relief against rules that prevent merchants from filing future lawsuits in the case.

”The truth is that there is no settlement with the retail industry, only an agreement with a handful of merchants who do not represent the industry as a whole,” Senior Vice President and General Counsel Mallory Duncan said. “Given that the judge knew this backroom deal was opposed by a broad range of small and large retailers alike and allows these fees to continue to skyrocket, it clearly should have never been approved.”

”This is a serious mistake the appellate court needs to correct,” Duncan said.

Full content: Businesswire

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.