Large U.S. retailers sue Visa, MasterCard over card fees

Thu May 23, 2013 1:30pm EDT

MasterCard and VISA credit cards are seen in this illustrative photograph taken in Hong Kong December 8, 2010. REUTERS/Bobby Yip

MasterCard and VISA credit cards are seen in this illustrative photograph taken in Hong Kong December 8, 2010.

Credit: Reuters/Bobby Yip

(Reuters) - A group of U.S. retailers, including Macy's Inc. (M.N) and Target Corp. (TGT.N), sued Visa Inc. (V.N) and MasterCard Inc. (MA.N) on Thursday, breaking off from a proposed $7.2 billion settlement reached last year over fees to process credit card transactions.

The lawsuit, filed in U.S. District Court in Manhattan, came ahead of a May 28 deadline for the millions of merchants affected by the settlement to decide whether to forego receiving damages under the pact and pursue their own legal action.

That settlement, pending in federal court in Brooklyn, would end litigation on behalf of merchants that accused Visa and MasterCard of inflating so-called interchange, or swipe, fees.

Many retailers criticized the proposed settlement after it was announced in July 2012. They say the pact offers inadequate compensation and forces them to sign broad litigation releases that could shield Visa and Mastercard from future lawsuits over antitrust violations.

By "opting out" of the settlement, the retailers can pursue separate litigation seeking damages over allegations of past antitrust violations. But even so, merchants would still be bound by other injunctive relief if the settlement goes forward, including changes to Visa and MasterCard's swipe-fee rules.

The pact received preliminary court approval from a federal judge in Brooklyn in November 2012, and Visa and Mastercard have said they are confident the settlement will win final approval.

Representatives of Visa and MasterCard had no immediate comment on the new lawsuit.

Also named as plaintiffs in Thursday's lawsuit are JC Penney Co Inc. (JCP.N), Kohl's Corp. (KSS.N) and TJX Cos (TJX.N). The lawsuit seeks compensatory and triple damages, as well as other remedies.

On Tuesday, Wal-Mart Stores Inc. (WMT.N) and 18 others said they would both opt out and consider pursuing separate legal actions over damages. Wal-Mart is not named as a plaintiff in the case filed Thursday.

(Additional reporting by Jonathan Stempel in Chicago; Editing by Martha Graybow, Lisa Von Ahn and Dan Grebler)

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Comments (7)
reality-again wrote:
Credit card companies are a mighty cartel who abuses of its power and drives many small businesses out of business through its rapacious merchant fees.
The Credit Card business is well protected politically, so Washington politicians are careful not to touch it.
Big companies can try working together against the might CC, but mom and pop stores are doomed.
Offshore tax havens are yet another example showing that in America, the game is rigged against small business.

May 23, 2013 3:44pm EDT  --  Report as abuse
ronryegadfly wrote:
Kudos to any bank, corporation and/or financial institution that achieves profitability and honestly serves the society in which it arises. But when big banks and financial entities get so large that they seek to gain advantage by influencing government, they cross they line and lose public trust.

May 23, 2013 6:54pm EDT  --  Report as abuse
CMDibe wrote:
I’d rather see those who pull this crap sitting in prison, and not able to buy their way out of their criminal behavior.

May 23, 2013 10:19pm EDT  --  Report as abuse
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