Judge Rejects $30B Visa and Mastercard Antitrust Settlement

Key provisions of the proposed settlement included interchange rate caps and rollbacks, removal of anti-steering restrictions, increased surcharging rights, and the ability for small merchants to form buying groups and negotiate with Visa and Mastercard directly. See the Verisave blog Visa and Mastercard Antitrust Settlement for more details regarding the proposed settlement.

Judge Margaret Brodie rejected the settlement because class members were not treated equitably relative to one another. Specifically, she found that the benefits of the settlement were likely to flow disproportionately to small, local merchants.

The judge found that large merchants were unlikely to benefit from the interchange rate caps and rollbacks because large merchants often negotiate lower interchange rates with acquiring banks or Visa and Mastercard. She also noted that the increased surcharging rights were unsatisfactory because restrictions on surcharging by some states would make it hard for national merchants to exercise these rights nationwide. Additionally, she found that the provision allowing merchants to form merchant buying groups and negotiate directly with Mastercard and Visa would be less valuable for larger merchants.

If the litigants cannot agree upon a revised settlement, which is approved by the court, the case will go to trial.

Retail industry groups applauded the decision while Visa and Mastercard issued statements expressing their disappointment with the judge’s decision.

For more information, see this Payments Dive article.