Judge Likely to Reject $30 Billion Visa, Mastercard Fee Deal

Bloomberg Law

"A $30 billion settlement between Visa Inc., Mastercard Inc. and retailers to cap credit-card swipe fees is likely to be rejected by a federal judge in Brooklyn, a setback in the two decade-long litigation.

US District Judge Margo Brodie in Brooklyn, New York said at a hearing Thursday that she probably won’t approve the deal, according to a transcript of the hearing. Brodie hasn’t officially ruled, but said she would “issue a written decision” in coming days, according to a summary of her comments in court on Thursday.

“My inclination is, and this is how I had started drafting the opinion, is not to accept the settlement,” Brodie said. “I don’t know what an adequate settlement would be but I do know that I’m troubled by this one, and nothing that I’ve heard today has changed my mind that, in fact, this settlement should be approved.”

Retailers have fought for decades to slash their share of the cost for accepting card payments, also known as interchange fees. Much of those fees are passed on to the banks that issue the cards, including giants like JPMorgan Chase & Co.and Citigroup Inc.

The deal, which was announced in March and subject to court approval, would have let merchants charge consumers extra in transactions involving Visa or Mastercard credit cards. When the agreement was unveiled, the parties said it also would have allowed the use of pricing tactics to steer consumers to lower-cost cards."