WASHINGTON–The U.S. Supreme Court declined to revive a $5.7 billion settlement between certain retailer and Visa Inc. and MasterCard Inc. over allegations that the two card companies had improperly fixed credit-card swipe fees. The move was immediately hailed by the National Retail Federation and many big companies. Analysts the suggestion could mean years of additional litigation to arrive at another settlement.
At issue was a 2012 settlement that some analysts had said represented the largest-ever U.S. antitrust deal, which at one point was worth as much as $7.25 billion. That value declined to $5.7 billion after reductions for about 8,000 merchants that opted out of the damages portion of the case.
The Supreme Court justices let stand a lower court ruling that had rejected the settlement, saying it didn’t sufficiently protect the interests of the merchants who called for rejecting the deal. Among those that opposed the earlier settlement were Amazon and Target. Justices made no comment as part of a list of orders released on Monday.
For the past decade Mastercard and Visa have been seeking to bring an end to the case, which involves more than $40 billion in processing fees the companies charge annually.
Opponents of the settlement had objected to what they said was a deal that stripped them of their right to sue the two card companies over their fee practices. The retailers further objected to the agreement for giving lawyers involved in the litigation fees amounting to $545 million.
Visa, MasterCard and their member financial institutions had expressed support for the agreement, saying the “overwhelming majority of plaintiffs were satisfied with the deal and did not object."
NRF Welcomes Ruling
The National Retail Federation welcomed the Supreme Court ruling, saying reinstatement of the case will allow merchants to address price-fixing by Visa and Mastercard and allow them to lower prices for consumers.
“If this settlement had been approved, the structure of fees that drive up the prices of everything consumers buy would have been cemented into place forever,” NRF Senior Vice President and General Counsel Mallory Duncan said. “Now something can finally be done to bring these fees under control. Retailers were skeptical of this settlement from the beginning,” Duncan said. “It would have done nothing to keep swipe fees from rising in the future. It was nobody’s idea of a good settlement.”