Five consumer and business advocacy groups are among those challenging a proposed settlement to end decades of antitrust litigation with Visa and Mastercard over the card networks’ interchange fees.
Changes from the prior proposal, which a court rejected in June 2024, “are too insubstantial and too susceptible to undermining by Visa, Mastercard, and card issuers to work effectively and thus are unlikely to meaningfully address the excessive fees and lack of competition that characterize the interchange fee system,” the groups wrote.
The groups include the American Economic Liberties Project, Consumer Reports, Demand Progress Education Fund, Small Business Majority and U.S. Public Interest Research Group.
Aside from representing their members’ interests, they noted they would also be affected by the pact. All five accept Visa and Mastercard as payment from donors or subscribers and would be bound by the settlement, if approved by U.S. District Judge Brian Cogan in Brooklyn, New York.
They filed their 23-page objection Dec. 16 in federal court in the Eastern District of New York, joining numerous other merchants and business associations that have found significant faults with the proposed settlement.
“The loopholes in the proposed settlement’s provisions actually provide a roadmap for how Visa and Mastercard can successfully circumvent the settlement’s fee reductions,” the groups wrote in their filing.
The new proposal also presents “a major shortcoming” in that it “does nothing whatsoever to change the fact that Visa and Mastercard centrally fix interchange rates for card-issuing banks,” the groups said.
The proposal unveiled in November would trim credit interchange rates by 0.1% for five years and impose a 1.25% rate for standard consumer cards for eight years. It would also give merchants the right to decline some higher-cost Visa and Mastercard-branded credit cards – a departure from the networks’ “honor all cards” rule – and the ability to add surcharges on some cards.
In its Dec. 15 objection to the settlement, Walmart, the largest U.S. retailer, asked Cogan to divide the enormous class of merchant plaintiffs, arguing that the interests of large national retailers diverge too widely from smaller class members. Merchant litigation over the networks’ card fees began in 2005.
