A retail group which was not a party to the original anti-trust fight between retailers and major card brands and card issuers over credit card interchange said it is moving closer to taking legal action to try and block a settlement in that case.
The National Retail Federation, one of the largest and best known of the associations of retailers, has announced that its board has authorized the group to take some action in an attempt to block the proposed agreement.
“The National Retail Federation categorically opposes the proposed settlement,” NRF President/CEO Matthew Shay said. “It does nothing to curb the anticompetitive behavior of Visa and MasterCard, and instead ensures that swipe fees paid by retailers and their customers will continue to rise while barring any future legal challenges.
“The proposal is a lose-lose-lose for merchants, consumers and competition. NRF will take any and all steps necessary to oppose the settlement as it is currently proposed and will work toward real reform of the swipe fee system.” A resolution approved by the NRF board authorizes the association to take steps including “intervention in pending actions” in order to reach a solution “equitable to the broad merchant community.”
The federation is exploring what form the legal action might take. NRF is not a party to the lawsuit, and U.S. District Court Judge John Gleeson has not yet fully outlined how outside groups will be allowed to intervene, or if the case qualifies as a class action, the association said.
Under the terms of the settlement, which was proposed in July, Visa and MasterCard along with some of the biggest card issuers would pay retailers a total of roughly $8.25 billion. The settlement also allows for retailers to surcharge, with certain restrictions, consumers who choose to pay with credit cards.
Credit unions were not directly involved in the settlement but have been members of different payment industry coalitions formed to protect credit and debit card interchange and which have had input into the settlement.
The financial institutions and card brands have generally treated the settlement as a done deal, but retailer opposition to the proposal has been building. Retail groups have argued that the proposed settlement only addresses previous damages (and that insufficiently), and does not address the ongoing question of how credit card interchange is calculated.