| NEW YORK
NEW YORK May 24 Visa Inc and MasterCard
Inc, opening another front in an eight-year battle over
credit card fees paid by retailers, on Friday asked a federal
judge to declare that the fees do not violate antitrust law.
The lawsuit seeks to give the card companies legal
ammunition against some retailers who are trying to opt out a
proposed settlement under which they would receive a share of
$7.2 billion in cash and fee discounts from the card companies.
The complaint filed Friday in Brooklyn federal court by the
credit card giants and a number of banks that issue their cards
asks U.S. District Judge John Gleeson to declare that
interchange, or swipe, fees are lawful and pro-competitive.
On Thursday, Target Corp and other retailers,
including JC Penney and Kohl's, broke away from the pact. The
retailers filed a lawsuit in Manhattan federal court against the
credit card companies alleging past antitrust violations and
The proposed settlement would end eight years of litigation
by merchants who accused Visa and Mastercard of inflating swipe
Friday's complaint was brought against retailers and trade
groups who were named plaintiffs in the swipe fee litigation,
but later opted out. If Gleeson rules that the swipe fees do not
violate antitrust law, it could prevent them from pursuing
separate damage actions.
It could also affect the ability of other retailers who opt
out to seek damages over swipe fees.
"A declaration in plaintiffs' favor against the defendants
is necessary to prevent the continuation of endless, wasteful
litigation between defendants and plaintiffs," the complaint on
The motion from the card companies is the latest volley in a
fierce legal fight over the settlement, which Gleeson
preliminarily approved in November. If granted final approval,
it would be the largest private antitrust settlement in U.S.
On Tuesday, Wal-Mart and 18 other major retailers said they
would opt out of receiving damages from the proposed settlement
and consider separate legal action. They say the pact offers
inadequate compensation for the billions of dollars they pay
each year in interchange fees and forces them to sign broad
litigation releases that could shield Visa and Mastercard from
future lawsuits over antitrust violations.
May 28 is the deadline for nearly 8 million merchants to
decide whether to opt out of receiving monetary damages from the
Visa and Mastercard, as well as lawyers for merchants that
support the deal, have said they are confident the settlement
will be approved.
"Enough is enough - this battle needs to be put to bed,"
Trish Wexler, a spokeswoman for the Electronic Payments
Coalition, a trade group representing the payment card industry,
said Friday in a statement responding to the filing.
If merchants that account for 25 percent or more of
credit-card volume opt out of receiving damages, Visa and
Mastercard have the option of terminating the proposed
A lawyer representing some of the merchants and trade groups
that have opted out of the settlement, Jeff Shinder, declined to
immediately comment on the filing.