Visa and Mastercard Ask Federal Court to Legalize Transaction Fees

Search form

Visa and Mastercard Ask Federal Court to Legalize Transaction Fees

Visa and Mastercard Ask Federal Court to Legalize Transaction Fees
Wed, 5/29/2013 - by Agence France-Presse

Credit card giants Visa and Mastercard sued retailers that rejected a multibillion-dollar settlement over transaction fees and asked the court to rule the fee practices weren’t illegal.

The latest legal maneuver comes after years of legal battles over so-called “swipe” fees retailers must pay credit cards in each transaction.

Last year, in a proposed settlement, Visa, MasterCard and some banks that issue their cards agreed to pay more than $6 billion to millions of merchants that had sued them for allegedly fixing the card use fees.

But a number of retailers and trade groups — including behemoths such as Walmart, Target and Macy’s — have rejected the deal, saying it would not address the underlying concerns over how the fees are set.

On Friday, the credit card companies launched a counter-attack, asking U.S. District Judge John Gleeson to rule that their fee practices didn’t violate antitrust law, according to the complaint filed in the U.S. district court in Brooklyn.

Visa and MasterCard want to put an end to the legal morass that began back in 2005 with the settlement, which would amount to about $7.25 billion — $6.05 billion for past damages and the $1.2 billion for relief.

“We believe the settlement is a reasonable way to end seven years of negotiation. We remain confident that this settlement will be approved in the fall,” said Trish Wexler, spokeswoman for the Electronics Payment Coalition, which includes Visa.

But last week, another group of retailers rejected the July 2012 draft agreement. They have until May 28 to formally reject the agreement, said a spokesman for the National Retail Federation.

A final hearing is scheduled for September 12.

The NRF “opposes the settlement because it fails to reform the price-fixing system… or to introduce transparency that would lead to competition to lower the fees,” said spokesman Craig Shearman.

“Rather than lowering the fees, the card companies have proposed that the fees be passed along to consumers in the form of a surcharge, even though most major retailers have rejected surcharges.”

In addition, he argued that the settlement amounts, as shared among millions of retailers, would only amount to about three months worth of transaction fees, which the NRF argued is insufficient.

“Swipe” fees range from about 1.8 percent to 2.5 percent, Visa has said, and are worth about $40 billion annually, according to news reports.

 

Article Tabs

900 environmental activists have been killed in the past decade – but only 10 perpetrators were convicted, report says.

Social movements and electoral movements, which are imperative for nonviolent social change, should work together.

In state capitols from Maine to Oregon, environmental advocates are filing bills to identify and ban noxious chemicals, and industry groups are fighting back.

As many as 17,000 people will die directly as a result of their states refusing to expand Medicaid.

Life in tent encampments, vehicles, motels, and storage units - REAL CHANGE focuses on four men who sell Real Change News, a street newspaper in Seattle. Follow ROBERT, GEORGE, DANIEL, and BUDDY as they navigate the less visible side of homelessness in America. Despite their struggles, they persevere. Each sells newspapers to get by.

A series of potential jurors voiced opposition to Occupy Wall Street as Cecily McMillan, 25, faces seven years in prison for assault.

Posted 6 days 4 hours ago

"Right now the future of Spain's youth looks pretty black. The country is not creating anything. With minimal job opportunities, many young people are going to other countries to find work.”

Posted 6 days 4 hours ago

The new 192-page book documents the activities of Occupy Austin and includes photographs of marches, arrests, assemblies, court trials, the camp itself and even law enforcement infiltration.

Posted 6 days 4 hours ago

New research finds that richest 0.1 percent of Americans have doubled their share of the pie, dramatically expanding their portion of the country's wealth in three decades.

Posted 6 days 4 hours ago

In All the Presidents' Bankers, Nomi Prins writes a painstakingly researched history of the financial industry's collusion with the White House to create a self-serving United States financial policy.

Posted 6 days 4 hours ago

How Corporations and Law Enforcement Are Spying on Environmentalists

At “local support 101” and other groups springing up in Delhi, mothers meet to discuss the latest news and reports about sexual violence meted out against young women and girls across India.

Robert Moses, 92, is about to lose his home.

Veterans are increasingly losing their homes to foreclosure.

Naomi Klein: "Fight Like Hell for Climate Justice"

Bill McKibben and Naomi Klein have a tough-love message: time is running out on climate change, and everything we've ever fought for is on the line.

Unnecessary Austerity, Unnecessary Shutdown

Reversing tax giveaways to the super-rich and the nation's largest corporations could raise $4 trillion within a decade and avert possible government closures.

Sign Up