Merchant Community Rebukes Class Action Settlement
In objections served today in the long-standing antitrust litigation against Visa, MasterCard and the largest banks pending in the US District Court for the Eastern District of New York, a majority of the named class plaintiffs strongly rebuked the proposed interchange settlement and urged the court to deny its preliminary approval. The 10 named plaintiffs were joined by nearly 1,200 small businesses and recognized brands that share the view that the proposed settlement locks in the broken interchange system rather than imposing meaningful reforms.
"The vocal opposition from such a substantial and diverse portion of the merchant community demonstrates just how ineffective and unacceptable this proposed settlement is," says Dave Carpenter, president and CEO, JD Carpenter Companies and chairman of the National Association of Convenience Stores. "The proposed settlement is simply a bad deal that further entrenches the anticompetitive practices of the Visa and MasterCard duopoly and denies merchants of their legal right to fight for real changes in court."
The named class plaintiffs opposing the proposed settlement of the case, which is known as "In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation," are Affiliated Foods Midwest, Coborn's, Inc., D'Agostino Supermarkets, Jetro Holdings LLC, National Association of Convenience Stores (NACS), NATSO, National Community Pharmacists Association (NCPA), National Cooperative Grocers Association (NCGA), National Grocers Association (NGA), and National Restaurant Association (NRA).
The named class plaintiffs were joined in multiple briefs in the action from a growing chorus of members of the merchant class, including nearly 1200 small businesses and recognized brands, such as Abercrombie & Fitch Co., Alon, American Signature, Inc., Ascena Retail Group, Inc., AutoZone, Best Buy, Big Lots Stores, Inc., Boscov's Department Store, LLC, Chico's FAS, Inc., CKE Restaurants, Inc., Costco Wholesale Corp., Crate & Barrel, Cumberland Farms, Dick's Sporting Goods, Dillard's, Inc., Dollar General, Expedia, The Gap, Inc., Giant Eagle, IKEA, J.C. Penney Corporation, Inc., Jo-Ann Stores, Kum and Go, Kwik Trip, Limited Brands, Inc., Lowe's, Macy's, Inc., Michaels, The Neiman Marcus Group, Inc., Papa John's International, Inc., Petco, REI (Recreational Equipment, Inc.), RaceTrac Petroleum, Inc., Saks Incorporated, ShopKo, Sports Authority, Starbucks, Target Corporation, Wal-Mart Stores, Inc., Wawa, Wendy's, and a variety of associations including the American Booksellers Association, and National Association of College Stores, National Retail Federation, and Retail Industry Leaders Association.
"The proposed settlement strips merchants of their legal rights and will actually make the anticompetitive problems with credit and debit cards worse than they are today," says NCPA CEO B. Douglas Hoey, RPh, MBA. "And, the settlement risks giving Visa and MasterCard a free hand to strangle newly emerging competition in the mobile payments market in the cradle."
Oral arguments before the court are scheduled for Nov. 9.