The National Retail Federation today asked a federal judge to “right or reject” a proposed settlement of an antitrust lawsuit over credit card swipe fees, saying the measure needs to be rewritten to do more to bring the soaring fees under control and that retailers who don’t support it should be allowed to completely opt out.
“The proposed settlement is next to worthless,” NRF Senior Vice President and General Counsel Mallory Duncan said. “It does nothing to reduce swipe fees or keep them from rising in the future, it offers retailers pennies on the dollar for the damage that has already been done, and it tries to tie merchants’ hands from ever suing again. This is actually worse than no settlement at all because it further entrenches the monopoly held by the card companies.”
“This proposal has not been agreed to by the retail industry by any stretch of the imagination,” Duncan said. “Thousands of retailers have flatly rejected the settlement, including many of the nation’s best-known brands. This is a backroom deal being pushed by the card industry and trial lawyers more concerned about their fees than protecting retailers or consumers.”
Attorneys representing NRF are scheduled to appear before U.S. District Court Judge John Gleeson in Brooklyn, N.Y., today for a hearing on final approval of the settlement. NRF argued in a brief filed this spring that the proposal “gives the credit card networks carte blanche to set and manipulate interchange rates” while giving retailers nothing in return.
Close to 8,000 merchants, representing at least 25 percent of Visa and MasterCard volume, have opted out of the $7.25 billion originally offered by the settlement. But the unusual structure of the proposal blocks them from opting out of other terms and conditions, including a ban on future lawsuits over the issue. NRF attorney Andrew Celli argued that retailers should instead be given the ability to fully opt out of the settlement.