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US: Visa, MasterCard $7.25 billion settlement with retailers is voided

 |  June 30, 2016

A federal appeals court on Thursday threw out a $7.25 billion antitrust settlement that Visa and MasterCard had reached with millions of retailers that accused the card networks of improperly fixing credit and debit card fees.

The 2nd US Circuit Court of Appeals in New York said the accord was unfair to retailers that stood to receive no payments, and in the court’s view, little or no benefit at all. It also decertified the case as a class action.

“This is not a settlement; it is a confiscation,” wrote Circuit Judge Pierre Leval, a member of the three-judge panel that unanimously struck down the settlement.

Visa spokeswoman Connie Kim said the Foster City, California-based company is reviewing the decision. MasterCard spokesman Seth Eisen said the company, based in Purchase, New York, is disappointed in the ruling and will review its next steps.

Thursday’s decision upends an accord resolving claims that the card networks overcharged merchants on interchange fees, or swipe fees, when shoppers used credit or debit cards, and banned them from nudging customers toward cheaper means of payment.

The settlement had been the largest all-cash antitrust accord in US history. It was intended to end litigation that began in 2005 and covered about 12 million retailers.

Thousands of retailers, including Amazon.com Target and Wal-Mart Stores objected to the accord.

Full Content: Reuters

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