Google Settles with Card Companies

Settlement terms with merchants including 1-800 Contacts, Ethan Allen and others have not been disclosed.

February 05, 2015

NEW YORK – Google is one of dozens of merchants that asked a New York court late last week to dismiss their lawsuits against Visa and MasterCard claiming that the card brands conspired to fix interchange fees for credit cards.

Along with Google, retailers 1-800 Contacts, Ethan Allen, Tiffany & Co. and Williams Sonoma settled with Visa and MasterCard on Friday. Settlement terms were not disclosed, and terms of the settlements must be approved by the court. Google still has a separate lawsuit against Visa and MasterCard pending in Texas, and the fate of that litigation remains unclear.

The retailers are among the major plaintiffs who opted out of an antitrust settlement that was originally worth more than $7 billion when it was reached in 2013. NACS is among the merchant groups, representing about 25% of U.S. payment volume for the two largest card brands, that refused to be part of the settlement, which would have prevented them from suing Visa and MasterCard in the future.

In January, the Supreme Court of the United States declined to review NACS’ swipe fee claim, arising from NACS’ lawsuit challenging the Federal Reserve’s swipe fee rules soon after they became effective in 2011. While the suit was successful in the U.S. District Court in 2013, that decision was later overturned on appeal by the D.C. Circuit Court of Appeals. But after opting out of the settlement, most of those large merchants pursued litigation separately.

The NACS lawsuit is one of more than 30 claims filed by merchants against the credit card companies since the original settlement. It is not yet clear what effect the settlement will have on Google’s separate antitrust lawsuit against Visa and MasterCard, which was filed on December 23, 2014.

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