Retailers File New Opt-Out Suit Against Card Companies

Latest suit against Visa and MasterCard claims a conspiracy in setting interchange fees.

May 15, 2015

NEW YORK –  A consortium of retailers – including Wawa, Quick Chek and Waffle House – filed a complaint this week accusing Visa and MasterCard of conspiring to fix interchange fees imposed on merchants for the privilege of accepting their credit and debit cards.

Because nearly all card issuers in the U.S. are members of Visa and MasterCard, and because those card issuers have agreed to rules that preclude them from independently competing for merchant acceptance, the two companies are violating the Sherman Act by restraining competition, according to the filing in Texas federal court, writes Law360.

The retailers allege that the setting of “default” interchange fees effectively fixes the price of acceptance at a supra-competitive level, forcing them to pay significantly higher costs to accept Visa-branded and MasterCard-branded credit and debit cards than they would if member banks issuing such cards competed for merchant acceptance.

“Visa and MasterCard, on behalf of their member banks, have exploited their market power in the market for merchant acceptance of credit cards and the market for merchant acceptance of debit cards,” the complaint alleges. “The exercise of this market power has led merchants to pay excessive interchange fees.”

In March, the credit card giants settled with the state of Arizona, the Minnesota Twins and more than a dozen retailers and restaurateurs who opted out of a $7.25 billion class action over similar interchange fee allegations. The settlements were for an unspecified amount.

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