Visa, Mastercard Settle Swipe Fee Lawsuit for $6.2 Billion
Visa, Mastercard and several major US banks on Tuesday finally settled a 13-year-old class action lawsuit with retailers across the country, which accused the credit card companies of fixing prices of card swipe fees to benefit the banks.
The $6.2 billion settlement is reported to be the largest antitrust settlement in history.
The class action suit was first filed in 2005 when both Visa and Mastercard were owned by banks, Bloomberg reports. Retailers accused them of illegally elevating the swipe fees that all merchants pay when a customer makes a purchase via card. Said fees help banks finance cardholders' credit card rewards. Inflating the fees in such a manner would break US antitrust laws.
A federal judge first approved a $5.7 billion settlement for the suit in 2013, but it was later overturned upon appeal. The new settlement amount adds on about $900 million more from the credit card companies and is still awaiting final approval from the court, CNN says. According to company filings, Visa will pay an additional $600 million of the new settlement, and Mastercard will pay $108 million more.
For their part, the credit card companies seemed eager to finally put the drawn-out legal proceedings to bed. “After years of thoughtful negotiation, we are pleased to be able to reach this agreement and move forward in our partnership with merchants to provide consumers convenient, reliable, secure ways to pay,” Visa's General Counsel Kelly Mahon Tullier said in a statement.
Likewise, General Counsel for Mastercard Tim Murphy said the company "can put this behind us and focus on continuing to innovate with our merchant partners to deliver the experience and convenience that consumers expect."