Appeals Court OKs Visa and Mastercard Settlement

A federal appeals court has approved a settlement of class action lawsuits filed against Visa and Mastercard.

The settlement, in which the payment card network agreed to pay a total of $5.6 billion to 12 million merchants who brought antitrust cases against them, was approved Wednesday (March 15).

Accordingly, the court rejected appeals by several persons who objected to the settlement and said that the district court had erred in classifying, approving the settlement, awarding service awards and calculating attorneys’ fees.

The action follows 15 years of litigation. In the lawsuit that led to a settlement, the plaintiffs allege that Visa and Mastercard harmed merchants by charging uncompetitive fees on payment card transactions.

Those who rejected the settlement and are appealing include a group of gas station owners who are at odds with oil companies over who was hurt by fees imposed by Visa and Mastercard, Reuters reported Wednesday.

The court ruled that disputes between these parties should probably be resolved in court, but payments to other plaintiffs in a class action suit should not be delayed, the report said.

The settlement resolves retailers’ claims that payment card networks charge them exchange fees and prohibits retailers from directing their customers to other payment methods that charge no fees, per the report.

The $5.6 billion settlement was approved by courts in 2019 after a $7.25 billion settlement approved by a different judge was overturned by an appellate court 3½ years earlier for giving insufficient consideration to some retailers, according to the report.

This decision comes about two months after Visa said in a Securities and Exchange Commission (SEC) filing that it was cooperating with a Department of Justice investigation that “seeks additional documents and information focused on US debits and competition with other payment methods and networks.”

The Department of Justice’s antitrust agency began investigating Visa in 2021 over alleged anticompetitive debit card processes. That includes determining whether Visa is preventing retailers from sending debit card transactions through low-cost card networks.

Get our hottest stories delivered to your inbox.

Sign up for the Newsletter to get updates on top stories and viral hits.

Check Also

Here’s What Happens When You Earn a Credit Card Sign-Up Bonus

Key point In order to get the bonus, you must first meet the spending requirements. …

Leave a Reply

Your email address will not be published. Required fields are marked *