Update 2/22/19: This settlement has now been approved by a court.
Original post: Visa, Mastercard and a number of U.S. Banks (JP Morgan Chase & Co, Citigroup, Bank of America among others) have agreed to pay a $6.2 settlement to end a lawsuit over swipe fees. The lawsuit alleged that these credit card companies violated federal antitrust laws by forcing merchants to pay swipe fees and preventing them from directing/steering customers towards other methods of payment such as cash or debit card.
This lawsuit has a long history:
- The law suit was first brought forward 13 years ago
- In 2012 a settlement for $5.7 billion was approved and then overturned on appeal in 2013
- In 2016 a settlement of $7.25 billion settlement was approved and then out by a federal appeals court in 2016.
This new $6.2 billion settlement still needs to be approved by a court. Earlier lawsuits were denied as it was found that some retailers would receive little or no benefit, there was also a worry that it would limit there ability to bring future lawsuits of this nature forward. A lot of the larger merchants have opted out of this settlement, include Walmart, Target and Kroger. These retailers believe they will be able to negotiate a better deal for themselves.
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