Card swipe deal draws protest
Clint Engel -- Furniture Today, October 29, 2012
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.
According to a release, the objecting retailers and merchant associations contend the proposed settlement won't reform "the anticompetitive and illegal practices engaged in by the credit card industry," but instead "will allow that industry to continue to take advantage of merchants and their customers while blocking competition and choice."
The statement added, "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 Walmart and Target.
Meanwhile, attorneys for the named plaintiffs have sought preliminary approval for the proposed settlement by a federal court in Brooklyn, N.Y. The opponents said they will file a brief against that action within 30 days.
The one home furnishings plaintiff in the case, Traditions Classic Home Furnishings in Minneapolis-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 better results, said Traditions co-owner Michael Schumann.
Under the settlement reached in July, Visa, Master-Card 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.