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The Retail Industry Leaders Association (RILA) said today it planned to opt out and object to the proposed swipe fee class action settlement with Visa and MasterCard. The proposed settlement, arising from lawsuits challenging Visa and MasterCard’s interchange practices, is pending before the U.S. District Court, Eastern District of New York.
“RILA and the overwhelming majority of our members agree that the proposed class action settlement is a bad deal for retailers,” noted Deborah White, EVP and general counsel of the Arlington, Va.-based trade organization. “The proposed settlement undermines merchants’ legal rights forever and fails to restrain the continued growth of swipe fee increases.”
By its actions, RILA not only makes clear its opposition to the deal, but also spurns the financial reward available under the terms of the proposed settlement.
Retailers maintain that the proposed settlement fails to address the anticompetitive practices that brought about the lawsuits and denies merchants the right to mount legal challenge to these practices ever again. RILA’s specific reasons for finding the proposed settlement unacceptable is that it locks in the Visa/MasterCard duopoly; offers no relief from interchange rate setting or other rules; denies all current and future retailers the right to bring future legal action related to interchange rules and rate setting, among other issues; and could limit emerging innovations that could bring meaningful competition to the marketplace, such as mobile payments.
In November 2012, RILA was one of a majority of named class action plaintiffs urging the court to deny preliminary approval to a proposed settlement.
Each member of the merchant class, which consists of an estimated 8 million retailers, has until May 28 to make known to the court their approval or disapproval of the proposed settlement before a Sept. 12 hearing in federal district court.