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Following the submission of a proposed class action interchange fee settlement to the court for preliminary approval, the Retail Industry Leaders Association (RILA) is inviting comments from the 8 million merchants who would be covered by the deal, to which the Arlington, Va.-based trade organization and 18 other industry groups have raised strong objections. The proposed settlement arises from lawsuits challenging the anticompetitive swipe fee practices of Visa and MasterCard.
Referring to the “flawed” proposal as “unacceptable in every way” and a “one-sided deal” that had caused “outrage within the retail community” because of “the harm that it will cause,” RILA president Sandy Kennedy added, “The proposed class action settlement not only preserves the broken debit and credit markets, but it also denies retailers their future legal rights and effectively forces merchants to fund the settlement through unrestrained interchange fees in perpetuity.”
The settlement agreement, along with a motion requesting that Judge Gleeson of the U.S. District Court for the Eastern District of New York preliminarily approve it, was filed Oct. 19, after more than seven years of litigation, mediation and negotiation among retailers, payment networks and nine major card issuers.
“[I]n my view, this settlement represents the very best and most realistic outcome possible for all involved,” said Robert Stolebarger, a partner at law firm Bryan Cave LLP and antitrust counsel for the Electronic Payments Coalition, which comprises credit unions, banks, and payment card networks, despite the opposition raised by many retail associations, among them RILA, the National Association of Convenience Stores, the National Cooperative Grocers Association, the National Grocers Association and the National Retail Federation.