Here We Go Again: Retailers vs. Credit-Card Companies in Another Lawsuit

An employee scans items at a Target Corp. store at the Westfield North County mall in Escondido, California Photograph by Sam Hodgson/Bloomberg

Big retailers are suing credit-card companies—again.

Bloomberg News reports: “Target Corp. and Macy’s Inc. joined with 15 other retailers in suing Visa Inc. and MasterCard Inc. over credit-card and debit-card fees after dropping out of a multibillion-dollar settlement of a similar case.”

If this sounds familiar, it ought to. Large retailers have been tangling in court with Visa and MasterCard for years, trying to get the credit-card bigs to reduce the fees stores pay for the privilege of offering credit-card options to consumers. More from Bloomberg News:

The biggest U.S. payment card firms illegally restrained competition for interchange fees by setting default rates and imposing almost identical rules for accepting cards, the retailers said in a federal court complaint in New York.

In the previous antitrust suit pending in Brooklyn federal court, dozens of large retailers, including Target and Macy’s, opposed a proposed $7.25 billion settlement, alleging it gave Visa and MasterCard too much freedom to raise rates in the future.

“Plaintiffs have paid and continue to pay significantly higher costs to accept Visa-branded and MasterCard-branded credit and debit cards than they would if the banks issuing such cards competed for merchant acceptance,” the retailers said in the latest complaint.

What does this mean for consumers? That’s not at all clear. It could turn out to be a wash, with the retailers and credit-card companies essentially compromising on modestly reduced fees. Or consumers might see a tiny bump in the price of some products. You can be sure prices will not go down as the result of all the litigation. Nothing will be certain until this long legal war ends—if it ever ends.

Law school students learn in their first year that finality is central to justice. Strangely, though, the real-life legal system often doesn’t offer finality, as illustrated by the credit-card-fee hostilities. Or maybe that’s not so strange. The lawyers, after all, continue to get paid as long as the war persists.

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