A federal judge recently approved a settlement of an antitrust lawsuit over credit card swipe fees, dismissing objections from National Retail Federation and thousands of others as “needless hyperbole” and praising a provision for surcharges even though it has been widely rejected by major retailers across the country.
“The oral presentations of the objectors at the fairness hearing were afflicted by needless hyperbole,” Judge U.S. District Court Judge John Gleeson said, citing in his Dec. 13, ruling.
Gleeson cited a “small number of objectors” to the settlement that was formally rejected by more than 8,000 merchants including many of the nation’s largest and best-known brands, according to a release from the National Retail Federation.
The lawsuit was originally brought by 19 retailers and trade associations, but all but nine rejected the proposed settlement when it was unveiled in 2012. Most of those remaining were individual stores or small chains. NRF was not a party to the suit, but has fought the settlement because its class-action status would impose its terms on thousand of federation members, according to the release.
“We are very disappointed that this deeply flawed settlement has been approved,” NRF Senior Vice President and General Counsel Mallory Duncan said. “It is not supported by the retail industry and would do nothing to reduce swipe fees or keep them from rising in the future. The settlement permanently ties the hands of thousands of businesses who wanted nothing to do with this misguided case, and a decision to approve it violates established law and common sense.”
“We will confer with our members, but given the amount of anger toward this settlement, I fully expect we will appeal,” Duncan said.
Averaging about 2%, swipe fees are a percentage of the transaction taken by banks each time consumers swipe a credit card to pay for a purchase, and total about $30 billion a year nationwide. The NRF states that the fees have tripled over the past decade and drive prices up for the average household by more than $250 per year.