U.S. District Judge John Gleeson might rule today on giving preliminary approval to the proposed antitrust settlement in the case against Visa and MasterCard over interchange, or "swipe," fees.
Opponents to the settlement have rigorously made their case to Gleeson, and to the public, arguing that in its current state, the agreement cements Visa and MasterCard's ability to increase interchange fees at will while denying merchants the right to propose meaningful reforms.
In addition to 10 of the 19 named plaintiffs in the case opposing the settlement, 1,200 small businesses and brands have also joined the fight and urged Gleeson to deny preliminary approval. "The vocal opposition from such a substantial and diverse portion of the merchant community demonstrates just how ineffective and unacceptable this proposed settlement is," said Dave Carpenter, president and CEO of the J.D. Carpenter Companies and chairman of the National Association of Convenience Stores (NACS), which has opposed the settlement from the start. "The proposed settlement is simply a bad deal that further entrenches the anticompetitive practices of the Visa and MasterCard duopoly and denies merchants of their legal right to fight for real changes in court."
Interchange fees are currently set unilaterally by card processors like Visa and MasterCard. While the proposed settlement provides for a $6 billion payment to retailers and allows merchants to pass the fees charged on them to their customers, it does not provide for transparency in the way that the fees themselves are set. Furthermore, the settlement precludes attempts by merchants to bring similar cases at any point in the future.
Preliminary approval of the settlement would mean that supportive plaintiffs could begin to sign up merchants to participate in the deal's benefits. Gleeson has said in court that the threshold for preliminary approval is "meaningfully lower" than it will be for final approval, which could take place months down the road.
- Jacob Barron, CICP, NACM staff writer