(LibertySons.org) – In March, Mastercard and Visa reached a settlement with a group of merchants, primarily small businesses. The antitrust settlement was worth $30 billion, but a federal judge rejected it.
In June, US District Judge Margo Brodie for the Eastern District of New York denied the preliminary approval for the settlement. She said that she was not likely to approve the final settlement in its current form. Her decision could force Mastercard and Visa to negotiate a new, more favorable settlement. Or the companies could choose to go to trial, where the decision might not be as favorable.
The settlement stemmed from a lawsuit dating back to 2005. The suit claimed merchants were forced to pay excessive fees to be able to accept Mastercards and Visas from consumers. The companies generally charge retailers and others between 1.5% and 3.5% of a transaction. In 2023, merchants paid about $72 billion in fees. The payment processors and their banks were accused of violating anti-trust laws in the lawsuit.
The companies agreed to pay $6.2 billion to settle part of the lawsuit with a group of 19 merchants in 2018. However, the lawsuit had two parts, which is why the latest settlement was reached.
The new deal would have lowered and capped the fees that Mastercard and Visa charged. The settlement would have removed anti-steering provisions that prevent merchants from steering consumers to cheaper cards. It would have given small businesses the same rights to collectively bargain with the payment processors for cheaper rates as larger retailers do.
Many trade groups and merchants opposed the settlement. The National Retail Federal said it was likely to oppose it. The group said the processing fees were still too high and that the settlement was only temporary because the agreement only capped the fees for five years.
Mastercard and Visa also previously agreed to a $5.6 billion swipe fee settlement in a class action case involving approximately 12 million merchants.
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