Marking a major victory for retailers, a federal appeals court today threw out the $7.25 billion antitrust settlement that Visa and MasterCard had reached with millions of retailers over the high swipe fees that retailers pay each time a customer uses a credit card ruling that it was unfair to retailers who stood to receive no payments and little or no benefit.
The reversal by the 2nd U.S. Circuit Court of Appeals in New York means that the swipe fee settlement is null and void and that there will be no distribution of payments to retailers. Merchants will not be eligible to participate regardless of whether they opted to remain or not to remain in the class action lawsuit.
In its ruling, the three judge panel also set aside the lower court’s certification of the action as a “class action,” stating that those who would not be eligible to receive a payment from the settlement fund were not adequately represented.
NATSO was one of the original plaintiffs in the case and opposed the settlement because it would not bring meaningful relief to retailers. The settlement stood to only bring monetary relief to merchants who accept credit cards and there was nothing to prevent Visa and MasterCard from hiking rates in the future to recoup the settlement costs.
NATSO will continue to review and analyze the ruling and will send further analysis in the coming days.
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