| NEW YORK, Sept 24
NEW YORK, Sept 24 The National Restaurant
Association said Tuesday it is joining the opposition to a
proposed $7.2 billion settlement between some retailers and Visa
Inc and MasterCard Inc over fees for credit card
The NRA, which represents the $600 billion U.S. restaurant
industry, is the last of six trade groups leading the case to
weigh in on the potentially historic settlement.
The trade group's chief concern is that the settlement would
prohibit all merchants that use Visa and MasterCard - whether
they decide to opt in or opt out of the settlement - from filing
future lawsuits over interchange issues.
"There is strong concern that the proposed settlement
agreement will not achieve the litigation's most critical goal -
to fundamentally change a broken marketplace in which swipe fees
are set," NRA President and Chief Executive Dawn Sweeney said in
NRA's board of directors unanimously voted to throw the
trade group's weight behind the opposition amassing against the
settlement, the group said. While the group has been pushing for
reforms that would bring transparency to the interchange system
and help lower costs for restaurants, the proposed settlement
accomplishes neither, it said.
The antitrust settlement was announced in July and requires
the approval of U.S. District Judge John Gleeson in Brooklyn,
New York, a process that could stretch well into 2013. If it
does receive approval, the settlement would be the largest of
its kind in U.S. history, resolving a seven-year-old lawsuit
accusing Visa and MasterCard of conspiring with major banks to
artificially inflate swipe fees.
Under the proposed deal, the credit card companies and banks
have offered to pay $6 billion and to temporarily reduce swipe
fees, also known as interchange fees, to save stores about $1.2
billion over an eight-month period.
While the settlement has won approval from grocers like
Kroger Co and Safeway Inc, it is being fought by
heavyweights like the National Retail Federation (NRF), retailer
Wal-Mart Stores Inc, global coffee chain Starbucks Corp
and a variety of other industry groups representing
everything from truck stop operators and convenience stores to
pharmacies to smaller supermarkets.
In its statement earlier this month, the NRF called the deal
"a lose-lose-lose for merchants, consumers and competition," and
said the deal would allow swipe fees, the amount paid to process
credit and debit card transactions, to rise unchecked.
Opponents of the settlement say the $7.2 billion is a small
amount of compensation for the billions of dollars they pay each
year in interchange fees.
"If you're going to opt in to the class, you can be bound by
the terms. But, if you are not going to opt in to the class, you
should not be," Scott DeFife, NRA's executive vice president for
policy and government affairs, told Reuters.
The credit card companies and lead lawyers appointed by the
court to represent stores say they are confident that the
settlement will receive the court's approval. Trish Wexler,
spokeswoman for the Electronic Payments Coalition, which
represents Visa and Mastercard, said the NRA had a hand in the
settlement process and is now just trying to "go back for
"Instead of accepting the benefits of the settlement, these
groups want even more, and will clearly never be satisfied,"
The groups are due back in court Thursday for a status
The case is In re Payment Interchange Fee and Merchant Discount
Antitrust Litigation, in the U.S. District Court for the Eastern
District of New York, No. 05-1720.