The National Retail Federation (NRF) is not satisfied with the $7.25 billion settlement offered by Visa and MasterCard in their antitrust lawsuit, and they’re looking to do something about it.
The NRF announced Tuesday that it’s Board of Directors has authorized an “intervention in pending actions,” and that it views the settlement as currently constructed to be inadequate.
“The National Retail Federation categorically opposes the proposed settlement. 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 challenge,” said NRF President and CEO Matthew Shay. “The proposal is a lose-lose-lose for merchants, consumers and competition.”
Under the agreement proposed on July 13 of this year, Visa, MasterCard and other defendants such as JPMorgan and Bank of America would forfeit $7.25 billion to the various retailers who sued the companies in an anti-trust case brought on by the rapid increase in swipe fees.
According to the NRF, swipe fees have tripled over the past 10 years to near $50 billion a year, resulting in an estimated $427 increase in fees per household over that time. The NRF also claims that such fees are especially harsh on online retailers, as “card not present” rates can sometimes be 33 percent higher than traditional POS sales.
NRF characterized the $7.25 billion as “pennies on the dollar,” and noted that without a clause in the agreement limiting how Visa and MasterCard can raise swipe fees in the future, the companies can quickly recoup their losses. NFR also claimed to be “particularly concerned” over a provision that would prevent merchants from ever suing Visa and MasterCard over swipe fees in the future.
While the Durbin Amendment of the Dodd-Frank Act has capped swipe fees for some of the nation’s largest banks, financial institutions have generally compensated by increasing other fees, such as checking.
Whether NRF is allowed to intervene in the lawsuit remains to be seen. NRF was not part of the original lawsuit, and U.S. District Court Judge John Glesson has not yet determined whether the case qualifies as a class action lawsuit.