03:31 PM EDT, 06/25/2024 (MT Newswires) -- A federal judge on Tuesday rejected a multi-billion dollar antitrust settlement in which Mastercard ( MA ) and Visa (V) had agreed to limit fees they charge merchants who accept their cards.

In March, the payment processors agreed to lower credit card fees and not increase them for five years as part of a settlement of a long-running case between the companies and US merchants. The move was estimated to deliver at least $29.79 billion in savings over the five-year period.

However, Judge Margo Brodie of the US District Court of the Eastern District of New York said Tuesday she was "not likely to grant final approval" to the settlement, and therefore denied the request by a group of merchants, primarily small businesses, for preliminary approval, according to a memo released by the court. Brodie had hinted earlier this month that such a ruling could be expected.

She ordered the parties to discuss and respond to the ruling by Friday. "The parties are directed to explain why such redactions are warranted," according to the memo.

Mastercard ( MA ) and Visa didn't respond to MT Newswires' requests for comment.

The Retail Industry Leaders Association, a US trade association for leading retailers, welcomed Brodie's decision.

"Leading retailers are grateful that Judge Brodie saw through the facade of the proposed settlement and understood that it would not provide the meaningful change that is needed to correct the competitive imbalance in the interchange ecosystem," RILA said in a statement. "The credit card payment system will remain dysfunctional until federal legislation is passed."

Separately, the Merchants Payments Coalition also welcomed the court order.

"Visa and Mastercard ( MA ) wanted a settlement that would let them keep price-fixing swipe fees and blocking competition," Merchants Payments Coalition executive committee member Christopher Jones said. "Thankfully, the judge made the right call in recognizing what a bad deal this would have been for Main Street merchants and their customers. It's extremely unusual for a judge to reject a settlement at the preliminary stage, so this shows how far Visa and Mastercard's ( MA ) proposal missed the mark."

Price: 455.70, Change: -1.26, Percent Change: -0.28