WASHINGTON --- The majority of merchant plaintiffs in a multibillion-dollar proposed antitrust settlement over credit card swiping fees now say they oppose the agreement with Visa, MasterCard and some of the nation's largest banks.
"The named plaintiffs object to the proposed settlement that is expected to be filed next week, because rather than reforming the anticompetitive and illegal practices engaged in by the credit card industry, it will allow that industry to continue to take advantage of merchants and their customers while blocking competition and choice," the opposing retailers and merchant associations said in a press release.
"In addition to the challenges for merchants, consumers struggling to pay for the basics need relief. Over the last seven years, merchants and ultimately consumers have been charged $350 billion in swipe fees by the card companies."
Ten of the 19 named class plaintiffs oppose the settlement. They are Affiliated Foods Midwest, Coborns, D'Agostino Supermarkets, Jetro Holdings, Jetro Cash & Carry Enterprises, National Assn. of Convenience Stores, NATSO, National Community Pharmacists Assn,, National Cooperative Grocers Assn., National Grocers Assn. and National Restaurant Assn.
The National Home Furnishings Assn. and Top 100 company Badcock Home Furniture & more also have indicated they are against the settlement, as have the National Retail Federation, Retail Industry Leaders Assn., National Assn. of College Stores and some large retailers including Wal-Mart and Target.
However, the one home furnishings plaintiff in the case, Traditions Classic Home Furnishings in Minneapolis and St. Paul., Minn., and Naples, Fla., has told Furniture/Today that the proposal was a hard-fought compromise. It offers certain protections and relief and would keep retailers and the court from a drawn-out trial that would not likely yield more favorable results, said Traditions co-owner Michael Schumann.
Under the settlement reached in July, Visa, MasterCard and several large banks agreed to pay more than $6 billion to end long-running lawsuits alleging the companies conspired to inflate interchange or swipe fees.
The agreement was initially viewed as a victory for retailers as the banks and credit card companies agreed to make the payment, temporarily lower the swiping fees, and clear the way for retailers to charge more to customers who pay with plastic by adding a surcharge.
But the deal quickly came under fire, partly for protecting the credit card companies from future lawsuits over the issue. Retailers also complained that the payment doesn't come close to making up for alleged overcharging, among other things.
"The associations opposing the proposed settlement represent hundreds of thousands of stores with trillions of dollars in sales, which is a demonstration of the fundamental problems with the proposal," the release said.
"There is strong concern among our member companies that the proposed settlement will not achieve the litigation's most critical goal - to fundamentally change a broken marketplace in which swipe fees are set," said Dawn Sweeney, president and CEO for the National Restaurant Assn.
"We don't expect any settlement to address every flaw of the current system, but we cannot allow it to lock in the worst elements."
B. Douglas Hoes, CEO of the Pharmacists association, said the settlement "only enables continued centralized price-fixing by Visa and MasterCard, but it prevents all current and future merchants - even those that are not yet in existence - from challenging actions in the future."
Attorney for the class plaintiffs are expected to file the settlement next week and ask the U.S. District Court for the Eastern District of New York for preliminary approval, the release said, adding that opponents will file a brief in opposition to preliminary approval 30 days after the proposal is filed.
