The National Association of Convenience Stores (NACS) raised concerns about the latest settlement announced in Payment Card Interchange Fee and Merchant Discount Antitrust Litigation (MDL 1720).
“The broken swipe fee system will not be fixed simply by Visa and MasterCard throwing some money to merchants,” said Lyle Beckwith, NACS Senior Vice President for Government Relations. “These cases must bring real reform to make a difference. We are pleased to see that some of the merchants’ lawyers and representatives refused to sign onto this flawed settlement and are continuing to press for the changes that antitrust law calls for and merchants and their customers deserve.”
NACS was one of the original named plaintiffs in MDL 1720, but successfully objected to the last settlement, which was filed in the case in 2012. The 2012 settlement was eventually overturned by the U.S. Court of Appeals for the Second Circuit because the court found that NACS and other merchants were not adequately represented in the settlement.
Unfortunately, the lawyers responsible for the overturned 2012 settlement have agreed to another flawed deal that won’t help resolve the many problems with swipe fees. The good news this time is that, regardless of this settlement, the case will continue. Major suits by merchants that opted out of the 2012 settlement and legal claims by the class of merchants seeking real changes to the rules that restrict the payment card market will continue. Lawyers leading those actions have not signed onto this new, inadequate settlement.
“We appreciate the lawyers and merchants who have not signed this settlement and are advocating for real reforms,” said Beckwith. “The defendants have spent decades violating the antitrust laws to ensure that the swipe fee market is broken. It will take staying power from merchants’ real advocates to bring reform after so many years of abuses from the credit card industry.”
Because the settlement will not fix the problems with swipe fees, this settlement will simply allow Visa and MasterCard to raise swipe fees – making virtually everything consumers buy more expensive – to pay for a settlement that won’t change anything. While that is unfortunate, NACS is pleased the case will still proceed toward what is needed here – a trial demonstrating the defendants’ antitrust violations along with reforms that will finally fix the broken swipe fee market.