Visa, MasterCard Class-Action Settlement Rejected by U.S. Court
01 July 2016 - 2:10AM
Dow Jones News
A U.S. Court of Appeals rejected the 2012 swipe-fee settlement
between the retail industry and payments companies Visa Inc. and
MasterCard Inc., calling the agreement "unreasonable and
inadequate."
"The benefits of litigation peace do not outweigh class members'
due process right to adequate representation," the ruling said.
Visa declined to comment.
Billed at the time as the largest settlement of an antitrust
class-action case in U.S. history, the deal— reached in July 2012
and originally valued at $7.25 billion—was to end years of
litigation brought by merchants against Visa and MasterCard and
several large banks that issue the companies' credit cards,
including Bank of America Corp. and J.P. Morgan Chase & Co.
Lawsuits filed by trade groups and several retailers in 2005
accused Visa and MasterCard of conspiring with banks to set
so-called swipe fees on credit-card transactions at arbitrarily
high levels. The fees, also called interchange fees, are set by
Visa and MasterCard and flow to banks that issue cards as revenue
each time a customer swipes a card at a merchant.
The settlement reignited a long-running battle over credit-card
transaction fees, with big-box merchants and retail trade groups
making their case for why the deal should be blocked.
"We conclude that the class plaintiffs were inadequately
represented," the court wrote.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
June 30, 2016 11:55 ET (15:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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