New Antitrust Class-Action Suit Emerges Against Visa and MasterCard

A new anti-trust suit against MasterCard and Visa has been brought up following a record $5.7 billion settlement.

The list of plaintiffs (which totals 29) include Progressive Insurance, Hewlett-Packard, and Toys “R” Us.

They claim that Visa and MasterCard both conspired with financial institutions to fix and enforce interchange fees, and removed the retailers’ abilities to negotiate these fees by enacting anti-competitive rules.

These include the “no surcharge,” “no discount,” and “no discrimination rules,” or the “honor all cards” rule.

These companies claim that Visa and MasterCard’s rules prevent merchants from surcharging customers in an attempt to price-signal their payment choices and to educate them on interchange fees.

If what these merchants call the “Visa and MasterCard Merchant Restraints” were eliminated, they would be able to steer customers away from payment choices that are more costly to these merchants.

In December of 2013, a class-action lawsuit brought to Visa and MasterCard was settled for $5.7 billion, though major retailers including Wal-Mart and Amazon had complained the settlement wasn’t enough. There were also thoughts that the settlement may possibly prevent those who accept it to bring forth lawsuits on these swipe fees in the future.

Credit card fees aren’t the only ones facing scrutiny. Debit card swipe fees came under the regulation of the Federal Reserve following the Dodd-Frank Act. These debit card fees were capped at 21 cents, but a judge had ruled that the cap was set too high, and retailers, including the National Retail Federation, are currently asking an appeals court to uphold this ruling.