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Judge signals she is unlikely to approve settlement

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Critics see little or no benefit for merchants

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Litigation began in 2005

By Jonathan Stempel

NEW YORK, June 13 (Reuters) - Visa's and

Mastercard's ( MA ) proposed $30 billion antitrust settlement to

limit credit and debit card fees for merchants is in peril,

after a New York judge signaled she was preparing to reject the

accord.

U.S. District Judge Margo Brodie in Brooklyn told lawyers

for the card networks and objectors at a hearing on Thursday

that she will "likely not approve the settlement," according to

court records.

She plans to write an opinion explaining her decision and

reasoning.

Both card networks said they were disappointed. Mastercard ( MA )

called the settlement a "fair resolution" that gave businesses

more flexibility in managing card transactions, and Visa called

it an "appropriate resolution" to the nearly 19-year-old case.

The settlement announced on March 26 was intended to

resolve most claims in the nationwide litigation, with small

businesses comprising more than 90% of the settling merchants.

Businesses have long complained that Visa and Mastercard ( MA )

charge excessive swipe fees, or interchange fees, for processing

credit and debt card payments, and illegally bar them from

steering customers toward cheaper forms of payment.

Swipe fees totaled $172 billion in 2023, and have more than

doubled in the last decade, according to the Merchants Payments

Coalition, which represents retailers, grocers, convenience

stores and gas stations.

Under the settlement, the average 1.5% to 3.5% swipe fee

would fall by at least 0.04 percentage points for three years.

Visa and Mastercard ( MA ) also agreed to cap rates for five years and

remove anti-steering provisions.

Objectors included the National Retail Federation, the

world's largest retailer trade group.

It called the settlement "manifestly insufficient" and its

benefits "meager and temporary," saying it would still let Visa

and Mastercard ( MA ) dictate swipe fees, and impose a "virtually

limitless" ban on future claims by merchants.

The case is In re Payment Card Interchange Fee and Merchant

Discount Antitrust Litigation, U.S. District Court, Eastern

District of New York, No 05-md-01720.