April 11 (Bloomberg) -- The Retail Industry Leaders Association said it will opt out of a multibillion-dollar antitrust settlement with Visa Inc. and MasterCard Inc. over so-called swipe fees, calling it a “bad deal for retailers.”
The trade group said in a statement today that it would forgo damages payouts and object to the agreement, which may be worth as much as $7.25 billion. The accord, estimated to be the largest-ever antitrust settlement, would end a case alleging that the card companies conspired with major banks to fix the fees charged to merchants when customers pay with plastic.
The settlement “undermines merchants’ legal rights forever and fails to restrain the continued growth of swipe fees increases,” Deborah White, the Arlington, Virginia-based association’s general counsel, said in the statement.
Several retail groups have opposed the settlement since it was made public in July, alleging that it doesn’t provide enough benefit for merchants and gives card companies too much leeway in the future to raise rates. Some large retailers, including Target Corp., Wal-Mart Stores Inc., Home Depot Inc., have also spoken out against the accord.
U.S. District Judge John Gleeson is scheduled to hear arguments today in federal court in Brooklyn, New York, over whether a website created by trade groups, Merchantsobject.com, is misinforming retailers about the settlement. The site encourages businesses to opt out and object to the deal.
Trish Wexler, a spokeswoman for the Electronic Payments Coalition, which represents credit card firms and banks, said RILA’s announcement is a “public relations stunt designed to distract attention” from the hearing.
Gleeson granted preliminary approval to the deal in November. A hearing on final approval is scheduled for September.
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).
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