(June 10): Visa Inc and Mastercard Inc’s US$200 billion ($258 billion) settlement with retailers won preliminary approval from a judge in decades-long litigation over so-called swipe fees.
The parties had previously proposed a US$30 billion settlement, but that was rejected by a separate judge in 2024.
“The amended settlement provides more extensive relief than the first settlement, notwithstanding the objections to its adequacy,” US District Court judge Brian Cogan said in a written decision on Tuesday.
A group of retailers and the payment firms proposed the most recent settlement in November, which was slated to save the merchants more than US$200 billion over eight years by giving them the opportunity to reject certain higher-cost credit cards. By one estimate, US vendors paid more than US$236 billion to accept debit and credit card transactions in 2024 and big-box retailers have long bemoaned those expenses.
Both Visa and Mastercard said they were pleased with the settlement.
“We believe that this agreement delivers on the expectations of the court and balances the interests of all parties involved,” a Mastercard spokesperson said in an emailed statement.
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A Visa spokesperson said the accord will provide “US merchants of all sizes with meaningful relief, more flexibility, and options to control how they accept payments from their customers”.
During an April hearing, trade groups representing the likes of Walmart Inc and other merchants said they would rather risk facing a trial than be bound by the terms of the pact.
Cogan said it would take significant time to prepare for a trial, which he said could last four to eight weeks.
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“This factor weighs in favor of granting preliminary approval,” he said.
The judge also said he considered what the retailers might realistically recover if they go to trial.
“There is a legitimate risk that plaintiffs will not be able to establish liability at trial,” he wrote. “Plus, it’s a safe bet that if they do succeed, the networks will appeal.”
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