Retailers and a professional baseball team have started a new battle in their ongoing legal fight with Visa. Plaintiffs claim that the credit card company fixed unreasonably high transaction fees.
The Minnesota Twins and other Minnesota businesses filed a complaint against Visa and MasterCard in February. They alleged that the credit card companies insulated themselves and their members from competition that would have lowered inflated prices that these plaintiffs had to pay to accept these credit cards. These fees greatly exceeded associated network and bank costs for processing the underlying transaction, according to the suit.
Wal-Mart also filed suit in federal court in Fayatteville, Arkansas on Mar. 25 and claimed that Visa conspired with banks to fix transaction fees in violation of federal antitrust laws. It alleged that Visa's conduct caused enormous damage from January 2004 to late November 2012 and objected to the requirement that retailers must honor all Visa-branded cards if it accepts any payments through Visa.
The $5 billion in damages sought by Wal-Mart could triple because of alleged violations of federal antitrust laws. Visa, however, sued Wal-Mart in June 2013 to stop it from filing its suit and claimed that it wanted to prevent the continuation of endless and wasteful business litigation.
The Twins, other Minnesota retailers, Wal-Mart and dozens of other large merchants dropped out of a nation-wide, $7.25 billion settlement with Visa and MasterCard Inc. over antitrust allegations and disputes over interchange fees that amounted to as much as two percent of credit card sales. A federal judge in Brooklyn New York approved the settlement in December. Retailers and trade associations objected to the settlement and claimed that the accord did not pay sufficient damages and unfairly blocked all national merchants from filing future lawsuits.
These retailers will pursue their own lawsuits. The settlement was reduced to $5.7 billion after the retailers withdrew.
These commercial disputes may be complex and have enormous and costly consequences. Parties to litigation and business disputes should seek advice to assure that their rights are protected and to protect their assets.
Source: Bloomberg, "Wal-Mart sues Visa claiming card transaction fee fixing," Andrew Harris and Christie Smythe, Mar. 28, 2014