Swipe-Fee Settlement Objectors Spared Contempt Finding
Groups opposing the Visa Inc. (V) and MasterCard Inc. (MA) multibillion-dollar settlement of swipe-fee price-fixing claims won’t be held in contempt by a federal judge for failing to fully correct websites he found misleading.
U.S. District Judge John Gleeson in Brooklyn, New York, today said he would “give the benefit of the doubt” to trade associations opposing the agreement and told them they should better police the websites for misstatements.
“I think there’s a powerful incentive for the objectors to be sure they’re not basing their argument on ground that’s not so firm,” Gleeson said.
Gleeson said on April 11 that the sites contained “bad information” that may have persuaded some merchants to drop out of the settlement and he ordered the groups to make corrections. One of the sites, Merchantsobject.com, continued to “obfuscate” key points as of April 24, the judge said in a written order that day.
The estimated $7.25 billion settlement, described plaintiffs as the largest ever in an antitrust case, would end an eight-year legal battle over Visa and MasterCard’s swipe, or interchange, fees. The plaintiffs in the case accused the companies of illegally fixing the fees charged merchants when customers pay with credit cards.
A group of trade associations and large retailers oppose the settlement, saying the card companies would be given too much leeway to raise rates in the future.
Gleeson told the groups on April 11 that the websites, including Merchantsobject, should carry disclaimers that changes were ordered, describe the consequences of opting out of the settlement, and prominently display the web address of an official court-approved public information site, paymentcardsettlement.com.
Retailers who chose to drop out of the deal based on what the judge described as misleading information on the sites may still have an opportunity to receive payments, Gleeson said today in court.
“There will be a remedy for that,” Gleeson said, adding that the specifics would be determined later. A hearing on final approval of the settlement is scheduled for Sept. 12.
The case is In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 05-md-01720, U.S. District Court, Eastern District of New York (Brooklyn).
To contact the reporter on this story: Christie Smythe in New York at email@example.com.
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.