retail news in context, analysis with attitude

The Associated Press reports that 10 out of the 19 retailers and trade associations that were part of a coalition suing MasterCard and Visa for alleged fee fixing will try to block a proposed $6 billion settlement that they perceive as woefully inadequate. They will be joined in that effort, the story says, by a number of retailers and trade associations that were not part of the original lawsuit, but that see the settlement as a negative.

According to the story, "Under the settlement, stores will be allowed to charge customers more if they pay with a credit card. The settlement covers only U.S. transactions. But the plaintiffs says that the settlement will not stop swipe fees from continuing to rise."

The settlement is expected to be submitted to the US District Court in Brooklyn this week, and the dissident plaintiffs will have 30 days to file their objections. They will say that the settlement, as currently constructed, does little to stopping the indiscriminate rise of swipe fees, which hurts both retailers and shoppers, while at the same time preventing future legal challenges to the credit/debit card companies.

The story notes that there are companies that support the settlement, believing it to be the best deal they will be able to get, and believing that if the settlement is not approved by the courts, the credit/debit card companies are likely to increase swipe fees almost immediately.

In a statement supporting the announcement by the coalition, Peter Larkin, CEO of the National Grocers Association (NGA), said:

"NGA is strongly opposed to the proposed settlement  because it does not the achieve the objectives NGA set out over seven and half years ago when it entered the class action litigation to represent the best interests of its independent retail members and the other merchants in the class.  Rather than bring fundamental reform to credit card swipe fees and the anticompetitive rules set by the credit card companies it will further entrench their market power and restrain merchants' rights - even those that don't yet exist - to challenge anticompetitive practices in the future, especially in the face of merchants attempts to use technological solutions to offer competitive payment options to consumers."
KC's View:
You'd think that if more than half the plaintiffs object to the terms of the settlement, there would be no way it could go through ... and at the very least, companies that refuse to sign onto a settlement that prevents them from suing in the future ought not be prevented from suing in the future.

But I'm no lawyer. Who knows how this will turn out? But purely as a matter of common sense and fairness, the judge ought to toss out the settlement and send everybody back to the bargaining table.