The National Retail Federation and a group of retailers asked a judge on Tuesday to reject a proposed settlement over credit card swipe fees that they maintain will drive up consumer prices by $30 billion per year.
The groups said the $7.5 billion settlement is a “surrender” that does not address the “evil” of price fixing by Visa, MasterCard and banks.
“This is an empty settlement,” NRF Senior Vice President and General Counsel Mallory Duncan said. “It fails to address the price fixing that harms merchants and their customers, it takes away retailers’ legal rights to ever try again and it offers virtually nothing in return. It should be tossed out of court as the failure that it is.”
Retailers and several of their trade associations filed an antitrust suit against MasterCard and Visa in 2005, alleging that the companies and banks colluded to fix interchange rates unreasonably high.
The NRF and other retailers who supported Tuesday’s request have opted out of the settlement due to restrictions that prohibit retailers from filing future suits involving interchange rates.
Retailers maintain that the settlement’s structure does not allow them to fully opt out, saying that retailers would completely lose the ability to file lawsuits over future rules and fees if the settlement wins final approval in September.
“Retailers simply cannot understand how the American system of justice can permit class action lawyers whom they have never met and who know nothing about their business to craft a ‘settlement’ that will preclude them forevermore from seeking redress on future losses without so much as offering them the opportunity to opt out,” the NRF said. “It gives the credit card networks carte blanche to set and manipulate interchange rates going forward without fear of future private suits. There is nothing that the credit card networks could give that is worth this unbridled loss of control.”
Retailers that have opposed the settlement include Neiman Marcus, Tiffany, J.Crew, The Gap, Crate & Barrel, Brookstone, Domino’s Pizza and Sonic Drive-In.