Judge Delays Ruling on Interchange Settlement
September 13 – The antitrust complaint against Visa Inc. and MasterCard Inc. will continue, prolonging the eight-year battle, after both proponents and defendants were heard during the fairness hearing Sept. 12. U.S. District Judge John Gleeson of Brooklyn reserved final judgment at the conclusion of a roughly 5 1/2-hour hearing, saying he had been presented with “very important and difficult issues.” His decision could take several months to deliver.
The $7.25 billion class-action settlement reached last year was supposed to put an end to years of fighting between the retail industry and payments companies Visa and MasterCard. Instead, it reignited a long-running battle over credit-card transaction fees that played out again yesterday, with big-box merchants and retail trade groups making their case for why the deal should be blocked. Were Gleeson to approve the deal, it would be the largest federal antitrust settlement in history.
Opponents argued that the settlement would harm–not help–merchants by essentially immunizing Visa and MasterCard from future lawsuits over their business practices, a point that the payment companies say is grossly overstated.
Proponents of the deal have heralded the settlement as a best-case outcome in a case where the plaintiffs faced significant hurdles to proving their claims. “We are talking about an extraordinarily large sum of money,” Craig Wildfang, an attorney representing a proposed class of as many as eight million merchants, said during the hearing.
Judge Gleeson questioned both opponents and critics of the deal on their arguments during the hearing. At one point he noted the settlement is a compromise between the parties in which neither side is likely to achieve everything that they’re seeking. “This is a lawsuit and to get relief you’ve got to win,” Judge Gleeson said, adding that his comment wasn’t meant to send a signal about his views of settlement.
Merchants first sued Visa and MasterCard in 2005, accusing the two companies of fixing the fees charged to merchants each time their customers used their credit or debit cards. They were accused also of preventing merchants from steering customers to cheaper forms of payments and other anti-competitive behavior.
Visa and MasterCard have denied the allegations.