WASHINGTON - Last week on the Senate floor, U.S. Sen. Richard Durbin (D-IL) called the proposed settlement of longstanding antitrust litigation between merchants and the credit card industry "a stunning giveaway to Visa and MasterCard."
Durbin, the Senate€™s second-ranking Democrat, said in his remarks that the lawsuit "had the potential to bring about important changes to the credit card system that would have promoted transparency, enhanced competition, and helped consumers."
What the proposed settlement has done, noted Durbin, is offer "a sweetheart deal" for Visa and MasterCard and a "bad deal for merchants" and consumers.
The senator noted that the proposed settlement "does nothing to change the anticompetitive fee-fixing that Visa and MasterCard do on behalf of their member banks," and that card companies would have "free reign to carry on their anticompetitive swipe fee system with no real constraints and no legal accountability to the millions of American businesses that are forced to pay their fees."
"This is a stunning giveaway to Visa and MasterCard, all for a payout of a mere two months worth of swipe fees," he continued, suggesting that class plaintiffs must now decide how they plan to move forward.
"This is a bad deal, but it is not a done deal. The merchant plaintiffs still have to decide if they will support it, and the court must approve it. Several plaintiffs €" the National Association of Convenience Stores, the National Grocers Association and the National Community Pharmacists Association €" have already rejected the deal."
"I know that Visa, MasterCard, and the banks are thrilled with this settlement, but this is not a settlement I would agree to," Durbin said, adding, "I hope that the remaining merchant plaintiffs will review the proposed settlement carefully and think hard about whether it will be good for the future of our credit and debit card systems. They should not be anxious to sign away that future and settle for a bad deal."