U.S. Supreme Court stands with merchants rejecting $5.7 billion settlement
The US Supreme Court on Monday announced that it has stood with a lower court ruling to refuse a $5.7 billion settlement between retailers and credit card companies Visa and MasterCard over credit card swipe fees. Eight justices in January heard arguments in an appeal brought by merchants.
The ruling, which is related to 2012 antitrust settlement of $7.25 billion, is in regards to Visa and MasterCard interchange fees that arguably hurt consumers as much as it hurts retailers. NRF Senior Vice President and General Counsel Mallory Duncan said that the swipe fees “drive up the price of retail merchandise, costing the average family hundreds of dollars a year in added expenses.”
The $5.7 billion settlement originally had a value of $7.25 billion before Macy’s, Home Depot and 8,000 merchants dropped out of the settlement. Still, the $7.25 billion settlement was a far cry away from the $40 billion in fees that retailers paid in 2016.
“This ‘settlement’ was never a settlement on behalf of the retail industry but rather a backroom deal that failed to represent the interests of retailers,” said Duncan in 2016.
Many argued that the settlement failed to reform Visa and MasterCard’s fees. Also, rather than lower the fees, the card companies proposed passing a surcharge to consumers. The Second U.S. Circuit Court of Appeals in New York struck down this part of the settlement in 2015.
Duncan added, “NRF challenged this settlement because it allowed Visa and MasterCard’s anti-competitive practices to continue. The court recognized this and struck them down accordingly.”
The NRF found that credit card swipe fees average about 2% of each transaction and amounted to $30 billion at the time of the settlement.
Copyright © 2021 FashionNetwork.com All rights reserved.