Judge Affirms Interchange Settlement For $5.6 Billion

Interchange fees were at the center of a $5.6 billion antitrust class-action settlement between Visa and Mastercard and 12 million retailers in the US. The settlement was upheld by a US federal appeals court.

A group of gas station owners tried to stop the deal, but the court did not let them. It also said that the $523 million in legal fees that were given to the retailers’ lawyers was not too much.

Stretching back to 2005, the litigation saw a settlement reached in 2012, with Visa and Mastercard agreeing to pay up $7.25 billion to retailers over claims that the card schemes had improperly fixed credit and debit card swipe fees.

But a number of big retailers and trade groups quickly turned down the deal and sued the card schemes again to get bigger fines and more changes. Nearly 8000 merchants opted out, bringing the settlement down to $5.7 billion.

In a victory for those merchants, in 2016 the 2nd US Circuit Court of Appeals in New York unanimously struck down the settlement, with Judge Pierre Leval saying: “This is not a settlement; it is a confiscation.”

The new $5.6 billion settlement was then approved by a different judge in 2019, and it has now been upheld.