On April 27th, Judge Brian Cogan of the U.S. District Court for the Eastern District of New York in Brooklyn, NY heard arguments for and against Visa and Mastercard's proposed $38 billion settlement with merchants. The settlement is in response to a 2005 class action suit that accuses the card networks and the banks that issue their payment cards of violating antitrust laws, causing merchants to pay excessive fees.
The judge did not issue a ruling at the hearing but indicated he plans to move quickly. According to Reuters, the judge appears to be taking a cautious approach, commenting during the hearing that the court should not use a "meat cleaver" approach to dismantle the credit card process.
Merchant groups including the Merchants Payment Coalition, the National Association of Convenience Stores and the National Retail Federation, oppose the proposed settlement, which they say is inadequate. The Electronic Payments Coalition, whose members include the card networks and large issuers, support the proposed settlement.
A $30 billion settlement that was proposed in 2024 was rejected by a different judge.
For more information on the proposed $38 billion settlement see Visa and Mastercard Reach New $38 Billion Settlement with Merchants.
