Wal-Mart—the largest retailer in the nation—entered the interchange debate after it filed suit against Visa last week, alleging that the card company colluded with banks to fix interchange rates unreasonably high.
In its 39-page complaint filed in a federal district court in Arkansas, Wal-Mart seeks to recover damages “for anticompetitive conduct” by Visa. The company said the card company and some of the nation’s largest banks have inflated network fees charged to retailers.
The case is similar to a current case filed in 2008 by merchants, which alleged that MasterCard and Visa set artificially high interchange fees. Wal-Mart did not take part in the suit, which led to a $5.7 billion settlement for the merchants. The merchants, through the National Retail Federation and other trade associations, have since appealed the settlement.
“Many retailers withdrew from the years-long antitrust litigation in New York because they did not like the settlement,” Credit Union National Association General Counsel Eric Richard said. “Presumably they think they can get a better deal by litigating on their own.”
In 1996, Wal-Mart and several other retailers, including The Limited, Sears and Safeway, filed suit against Visa and MasterCard seeking billions in damages for policies that allegedly violated federal antitrust laws.
The retailers settled with Visa and MasterCard just before trial, and the resulting settlement was, until recently, the largest antitrust settlement in history. The card companies paid the retailers $3 billion to release current and future claims against their member banks—a provision appealed by retailers that an appeals court subsequently upheld.