Retailers rejoice as the Second Circuit Court off Appeals court has ruled the settlement from Visa and MasterCard to be “unreasonable and inadequate.”
NACS is celebrating the recent decision made by the Second Circuit Court of Appeals to overturn the class-action settlement in the case In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation.
The aforementioned case led to a proposed settlement valued at $7.25 billion in 2012, and this ruling called the settlement “unreasonable and inadequate.”
NACS led efforts to oppose the $7.25 billion proposed settlement, which when it was announced in July 2012 was the largest antitrust settlement in U.S. history, because the relief it offered was inadequate and the release was overly broad.
NACS both opted out and objected to the proposed settlement because it offered class members money damages of only about two months’ worth of interchange and, among other things, limited modifications to Visa’s and MasterCard’s surcharging rules. Worse, the proposed settlement required class members to release Visa and MasterCard from liability, forever, for any anticompetitive rules currently in place (including the interchange or swipe fee rules) and/or any “substantially similar rules” instituted at any time in the future.
In addition to opposition from NACS, the proposed settlement was opposed by the majority of named plaintiffs and approximately 1,200 additional merchants and retailer groups filed papers objecting to preliminary approval of the proposed settlement.
The convenience store industry has credit card fees of $10 billion, according to the recently released NACS State of the Industry Report of 2015 Data.
“We are pleased that the Second Circuit Court of Appeals has thoughtfully addressed the problems we have long identified with this proposed settlement. We will work to help ensure that this moves forward in a way that recognizes the best interests of merchants and the consumers they serve,” said NACS president and CEO Henry Armour.
