US: Court expert predicts few returns for plaintiffs in swipe-fee case

Court expert Alan O. Sykes, hired to advise on the lawsuit against major credit card companies’ practice of swipe-fees, filed a memorandum Wednesday to Judge John Gleeson outlining his opinion on the challenges plaintiffs face in proving the anticompetitive effects of such fees as well as the damages caused.

In his 51-page memo, Sykes advises the court that retailers suing the credit card companies will likely secure “little or no relief at the conclusion of the trial.”

Further, Sykes said plaintiffs are facing an uphill battle in their efforts to show that swipe-fees “cause anticompetitive harm that outweighs their pro-competitive benefits.” If the plaintiffs were to prove such anticompetitive effects of the interchange fees in question, proving damages would be yet another difficult hurdle to overcome, said the report.

Sykes’ opinion comes as the defendants, credit card giants Visa and MasterCard, passed on an opportunity to drop their record-setting settlement offer. More than one quarter of merchants offered the settlement have opted-out, allowing the defendants the opportunity to drop the multi-billion dollar offer altogether.

The case is Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation.

The memo was also filed the same week retailers requested, in a separate case, that current rules regarding interchange fees to remain in place as the US Federal Reserve appeals a previous ruling by US District Judge Richard Leon, which found that the central bank incorrectly capped fees at a higher than intended level.

The full memo can be read through the link below.

Full Content: Re: In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation: Economic Issues Pertaining to Proposed Final Settlement

Additional Content: Bloomberg

Related Content: Interchange Fees: The Economics and Regulation of What Merchants Pay for Cards

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