The US Supreme Court has declined a bid by retailers to revive a $7.25 billion antitrust settlement they reached with Visa and Mastercard over claims the card networks improperly fixed payment card interchange fees.
US Supreme Court rejects $7.25 billion card interchange fees revival bid
The high court left in place a lower court decision that threw out the interchange fees settlement on the basis that it was unfair to retailers that stood to receive no payments and derive no other benefits.
The brief Supreme Court order noted that Chief Justice John Roberts and Justice Samuel Alito did not participate in consideration of whether to take up the appeal. No reason was given.
The interchange fees settlement had been intended to resolve claims that merchants were overcharged on interchange fees when shoppers used credit or debit cards, and were barred from directing customers toward cheaper means of payment.
The deal had been the largest all-cash US antitrust settlement, although its value shrank to about $5.7 billion after roughly 8,000 retailers “opted out.”
The 2nd Circuit US Court of Appeals found that the accord was unfair to retailers that stood to receive no payments and, in the court’s view, little or no benefit at all. It also decertified the case as a class action.
The circuit court’s decision was a blow to the credit card industry, which hoped the settlement would end a decade of litigation brought on behalf of about 12 million retailers against Visa, MasterCard and banks that issue their cards.
Companies including Amazon, Costco and Wal-Mart opposed the settlement and challenged it on appeal. Card issuers American Express and Discover Financial Services also objected to the settlement.
A federal judge in Brooklyn had approved the settlement in 2013, saying it offered significant damages and meaningful protections against future harm.
Many retailers and trade groups objected. Some said the payout should have been higher while others said the settlement would have made it too difficult to sue Visa and MasterCard.
According to the National Retail Federation trade group, retailers pay roughly $60 billion annually in interchange fees, which typically average around 2%.
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