ARLINGTON, Va. — National Grocers Association here and Wal-Mart Stores both said last week that they oppose the settlement of antitrust litigation proposed by Visa, MasterCard and their member banks related to credit card interchange fees, increasing the possibility that the settlement will be dismissed and the case will proceed.
“NGA joined the lawsuit on behalf of its independent retail grocer members over seven years ago to bring about real reform of the anticompetitive credit card swipe fee system,” said Peter Larkin, president and chief executive officer, NGA. “This proposed settlement agreement fails in this regard by allowing Visa and MasterCard to continue their dominant anticompetitive practices.”
NGA is a named plaintiff and class representative in the lawsuit. Bentonville, Ark.-based Wal-Mart Stores also said it also opposed the settlement, as did the National Association of Convenience Stores.
Jeff Lenard, a spokesman for NACS, told SN that if enough plaintiffs reject the proposed settlement, it could proceed to trial. Class plaintiffs have until early fall to decide, he said.
“We feel that by rejecting the terms of the settlement, it gives us the most amount of latitude to effect permanent change in the card system,” he said.
Related story: Retailers Split on Interchange Lawsuit
The suit alleges that Visa, MasterCard and their banks conspire to set interchange fees artificially high in market that lacks competition. The card companies claim their fees are necessary to cover the costs of processing and fraud prevention.
Both NGA and Wal-Mart cited terms of the settlement that they said would make it difficult to take action against the card companies in the future.
Wal-Mart also said the proposed settlement would “constrain emerging payments innovation.”
“The proposed settlement would not structurally change the broken market or prohibit credit card networks from continually increasing hidden swipe fees,” the company said.
As previously reported, the card companies proposed a payment of $6.05 billion to merchants in the class-action suit and another estimated $1.2 billion in value through a temporary reduction in interchange fees.
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