Let the Appeals Begin; NRF Files Against Interchange Settlement (Jan. 3, 2014)
The National Retail Federation (NRF) formally has appealed a $5.7 billion settlement with MasterCard and Visa over credit card interchange fees, opening the next phase of a long-running legal dispute between merchants and the payment card networks. Last month, U.S. District Court Judge John Gleeson granted final approval to the settlement of a class-action lawsuit brought by a group of retailers in 2005 over claims the networks illegally colluded to fix interchange fees charged to retailers who accept credit card payments. Originally announced in July 2012, the settlement was criticized by a number of retail groups and merchants, which claimed it provided the networks with too broad a release from future interchange-related lawsuits. Approximately 8,000 merchants opted out of the deal, reducing the settlement amount to $5.7 billion as of this past summer—still among the largest antitrust settlements in U.S. history.
Other retailers—including Walmart, Amazon.com, 7-Eleven and Barnes & Noble Inc.—said they planned to appeal the settlement but were told in December 2012 by the Second U.S. Circuit Court of Appeals in New York City to wait until the District Court granted final approval of the settlement before appealing. With that approval now granted, the NRF formally filed its appeal earlier this week.
“The settlement does nothing to reform the price-fixing payments system that has let credit card swipe fees skyrocket over the past decade and nothing to keep them from continuing to soar in the future,” said Mallory Duncan, NRF senior vice president and general counsel. “Instead of lowering fees, the card industry’s settlement proposes that merchants pass them along to consumers in the form of surcharges. That is absolutely the opposite of what retailers sought, and major retailers have soundly rejected surcharging.” To date, none of the other retailers or retail groups officially have filed an appeal.
