Read

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.

 

Add new comment

Sign Up

Article Tabs

Bernie Sanders, Berning of America, Occupy movement, political revolution

What’s happening in America right now doesn’t come as a surprise to those who have been trying to shed light on so many social injustices our country is facing.

Dan Price became a media sensation when he announced that the minimum wage at his company, Gravity Payments, would rise to $70,000 a year, but Forbes unearthed fraud on a massive scale.

According to records obtained by New York Civil Liberties Union, the country's most powerful police force tracks cellphones using "stingrays," which have no guiding legal policy.

Wikileaks, Julian Assange, Ecuadorian embassy, political persecution

The WikiLeaks founder has been arbitrarily detained by the U.K. and Sweden for more than five years and should be released immediately with compensation, according to a Geneva-based UN working group on arbitrary detention.

Keystone XL pipeline, tar sands, bitumen, carbon emissions, TransCanada, Enbridge, Stephen Harper, Energy East pipeline, TransMountain pipeline, Northern Gateway, Warren Buffet, First Nations

A major obstacle facing new oil transport projects is the strong resistance from Canada’s indigenous First Nations, who own or claim much of the land that the proposed pipelines would cross.

U.K. housing prices, soaring home prices, soaring rent costs, Eviction Resistance, housing bubble mortgage-backed securities, Great Recession, rising homelessness

Housing prices in London have risen by 50% in the last five years – and when the UK property bubble goes boom, it will be proportionally bigger than the U.S. housing bust at the onset of the financial crisis in 2007.

Posted 5 days 9 hours ago
income inequality, wealth inequality, rigged economy, economy of the 1%

Economic inequality inspired Occupy Wall Street, which transformed our political discourse with the concept of the “1 percent” and the “99 percent,” and today the presidential candidacy of Bernie Sanders is altering the political landscape.

Posted 2 days 10 hours ago
Bernie Sanders, Berning of America, Occupy movement, political revolution

What’s happening in America right now doesn’t come as a surprise to those who have been trying to shed light on so many social injustices our country is facing.

Posted 1 day 3 hours ago
Keystone XL pipeline, tar sands, bitumen, carbon emissions, TransCanada, Enbridge, Stephen Harper, Energy East pipeline, TransMountain pipeline, Northern Gateway, Warren Buffet, First Nations

A major obstacle facing new oil transport projects is the strong resistance from Canada’s indigenous First Nations, who own or claim much of the land that the proposed pipelines would cross.

Posted 2 days 9 hours ago
Paris climate accord, COP21, carbon emissions, 2 degrees C, emissions reductions, renewable energy transition, renewable energy investments, clean energy investments, solar power, wind power, fossil fuel divestment

Changing the way the world is powered means big spending – and huge investment opportunities – with energy finance models suggesting clean power investments need to rise by an additional 75 percent, to $12.1 trillion, in the next 25 years.

Posted 4 days 8 hours ago
Transatlantic Trade and Investment Partnership, TTIP, corporate trade deals, Investment Court System, German Magistrates Association, Investor State Dispute Settlement, ISDS, Global Justice Now

The German Magistrates Association (DRB) last week dealt a major blow to the Transatlantic Trade and Investment Partnership, as judges said special courts allowing firms to sue countries were unnecessary and "had no legal basis."

Dan Price became a media sensation when he announced that the minimum wage at his company, Gravity Payments, would rise to $70,000 a year, but Forbes unearthed fraud on a massive scale.

Moyer, who became best known for identifying eight stages of successful social movements, called the Movement Action Plan, envisioned a proliferation of groups each maximizing their strength while supporting a broad movement unity.

We need a guaranteed income to ensure that the benefits of 60 years of U.S. prosperity go to all Americans – not just to the few who know how to redistribute the nation’s wealth.

Chinese monetary policy, Asian Infrastructure Investment Bank, Chinese currency, Chinese currency manipulation, Special Drawing Rights, rising dollar

If war and hostilities between the great powers are to be avoided, the future of global capitalism may well rely on a combination of Western markets and institutions backed up by totalitarian institutions like the regime in Beijing.