Majority of Named Plaintiffs Oppose Visa/MasterCard Settlement
Named Plaintiffs, representing all U.S. merchants, vow to continue fight for real credit card fee reform
WASHINGTON, Oct. 12, 2012 /PRNewswire-USNewswire/ -- Today a majority of the named plaintiffs representing the class of all merchants in the case of "In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation" announced their opposition to the proposed antitrust settlement agreement with Visa, MasterCard and some of the nation's largest banks. The named plaintiffs object to the proposed settlement that is expected to be filed on October 12, because rather than reforming the anticompetitive and illegal practices engaged in by the credit card industry, it will allow that industry to continue to take advantage of merchants and their customers while blocking competition and choice. In addition to the challenges for merchants, consumers struggling to pay for the basics need relief. Over the last seven years, merchants and ultimately consumers have been charged $350 billion in swipe fees by the card companies.
The named class plaintiffs opposing the proposed settlement include: Affiliated Foods Midwest, Coborn's, Inc., D'Agostino Supermarkets, Jetro Holdings, Inc. and Jetro Cash & Carry Enterprises, National Association of Convenience Stores (NACS), NATSO, National Community Pharmacists Association (NCPA), National Cooperative Grocers Association (NCGA), National Grocers Association (NGA), and National Restaurant Association (NRA). That means ten of the nineteen named class plaintiffs, a majority, oppose the settlement.
The named plaintiffs have been joined by a growing chorus of members of the merchant class in the litigation including the National Retail Federation (NRF), Retail Industry Leaders Association (RILA), and National Association of College Stores (NACS), who have come out in opposition to the proposed settlement. The associations opposing the proposed settlement represent hundreds of thousands of stores with trillions of dollars in sales, which is a demonstration of the fundamental problems with the proposal.
"The people asking the court to approve the proposed settlement simply do not represent the interests of most merchants, we do," said Hank Armour, President and CEO of NACS. "The proposal represents a minority view and must be rejected."
"On behalf of our members and the consumers they serve, we will continue to pursue our rights and fight for reform of the excessive anticompetitive credit card fees and oppressive rules that are being imposed on all merchants," said Peter J. Larkin, President and CEO of NGA.
"There is strong concern among our member companies that the proposed settlement will not achieve the litigation's most critical goal – to fundamentally change a broken marketplace in which swipe fees are set," said Dawn Sweeney, President and CEO for the National Restaurant Association. "We don't expect any settlement to address every flaw of the current system, but we cannot allow it to lock in the worst elements."
"This proposed settlement not only enables continued centralized price-fixing by Visa and MasterCard, but it prevents all current and future merchants – even those that are not yet in existence –from challenging actions in the future," said B. Douglas Hoey, RPh, MBA, CEO of NCPA. "That is simply unfair."
The proposal will also hamper the potential for cutting edge technology to reduce payment card costs. The proposed settlement would apply to mobile payments and would open the door for Visa and MasterCard to use anticompetitive means to dominate that market and block competition from new entrants in the market.
"We have a responsibility to represent all U.S. merchants and a settlement that cuts off the best chance for the market to help deal with swipe fees and mobile payments, cannot be allowed to go forward," said Robynn Shrader, CEO of NCGA.
"The proposed settlement is a bad deal that does not represent the best interest of merchants and their customers, further entrenches the anticompetitive practices of the Visa and MasterCard duopoly, and denies merchants their legal right to fight for real changes in court," said Lisa Mullings President and CEO of NATSO.
"Class counsel" is expected to file the proposed settlement on October 12 and ask the United States District Court for the Eastern District of New York for preliminary approval. Opponents of the settlement will file a brief in opposition to preliminary approval either on November 13, 2012 or 30 days after the proposal is filed.
SOURCE National Grocers Association