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Ahead of the expected Oct. 12 filing of a proposed antitrust settlement agreement with Visa, MasterCard and other large banks, most of the named plaintiffs in the original class action, In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, expressed their opposition to it. According to the named plaintiffs, rather than reforming the credit card industry’s anticompetitive practices, the settlement would allow such practices to continue, hurting merchants and consumers alike.
The named class plaintiffs opposing the proposed settlement include Affiliated Foods Midwest, Coborn’s Inc., D’Agostino Supermarkets, National Association of Convenience Stores (NACS), National Cooperative Grocers Association (NCGA) and National Grocers Association (NGA).
Along with the named plaintiffs, members of the merchant class involved in the litigation include the National Retail Federation (NRF), Retail Industry Leaders Association (RILA), which have also been outspoken in their opposition to the proposed settlement.
“On behalf of our members and the consumers they serve, we will continue to pursue our rights and fight for reform of the excessive anticompetitive credit card fees and oppressive rules that are being imposed on all merchants,” said Peter J. Larkin, president and CEO of Arlington, Va.-based NGA, who added that the proposal “does not achieve the objectives NGA set out over seven and half years ago when it entered the class action litigation to represent the best interests of its independent retail members and the other merchants in the class.”
As well as preventing all current and even future merchants from challenging any price-fixing actions going forward, the proposal would also impede the potential for new technology to lower payment card costs, according to the named plaintiffs, which add that the proposed settlement would apply to mobile payments, thereby enabling Visa and MasterCard to use anticompetitive means to dominate that market and block any competition.
“We have a responsibility to represent all U.S. merchants and a settlement that cuts off the best chance for the market to help deal with swipe fees and mobile payments cannot be allowed to go forward,” said Robynn Shrader, CEO of Iowa City, Iowa-based NCGA.
“Negotiators have greatly underestimated the outrage among retailers over this flawed proposed settlement,” asserted Sandy Kennedy, president of Arlington-based RILA, who characterized the proposal as “unacceptable in every way,” also noting that “retailers overwhelmingly view this proposal not as a settlement, but as surrender.”
Settlement opponents plan to file a brief in opposition to preliminary approval by the U.S. District Court for the Eastern District of New York either on Nov. 13, or 30 days after the proposal is filed
In related news, industry groups including the Food Marketing Institute, the NRF and NACS filed suit earlier this month against the Federal Reserve, alleging that it favored banks rather than following Congress' instructions regarding rules on debit card swipe reform.