US retail trade groups ask to join $5.54bn Visa and Mastercard lawsuit
America’s two largest retail trade groups want to join a federal lawsuit filed more than 15 years ago against Mastercard and Visa. The suit is currently in the midst of being appealed.
Levelled against the card issuers in 2005, the suit saw them both – along with some big banks – agree to pay $5.54 billion to settle the case. It hinges around the two firms charging merchants excessive fees.
But now, the Retail Industry Leaders Association (RILA) and the National Retail Federation (NRF) are arguing that the class of merchants the suit’s plaintiffs are seeking to certify is too broad.
They think this lack of specificity will prevent those retailers who don’t like the settlement terms from opting out and taking their own legal action.
First spotted by American Banker, the New York filing by the trade groups says they have tried to negotiate this merchant class definition since mid-2017.
But the groups say negotiations have broken down in recent years, having last met over the issue in April 2019.
Now the two bodies are asking the judge for permission to become parties in the lawsuit.
“The proposed class is entirely too broad and in effect would prohibit retailers from pursing their own grievances against card networks,” Deborah White, the Retail Industry Leaders Association’s senior executive vice president and general counsel, said in a statement.
“We are asking the court to recognise us as parties after our repeated attempts to work with court-appointed counsel were rebuffed. We are particularly concerned that the current class would not represent our interests.”
Visa is also facing claims its practices are anticompetitive by the US Department of Justice (DOJ).
The department wants to understand whether Visa abuses its position in the debit card market. It also wants to look into whether it limits merchants’ ability to route transactions through less expensive networks.
US industry group the Merchants Payments Coalition has welcomed the DOJ investigation.
In June 2020 the UK’s Supreme Court unanimously upheld a ruling that Visa and Mastercard’s interchange fees are anti-competitive.
Retail groups in the UK have also labelled the two firms as a “duopoly” charging “excessive” card fees.