$5.7B Settlement Reached in Visa, Mastercard Fee Fixing Class Action Lawsuit

This is a settlement for the Antitrust lawsuit.

Boston, MA: A settlement has been approved in a credit card fees class action lawsuit, by a United States federal judge. The settlement is for an estimated $5.7B, between Visa Inc (NYSE:V) and MasterCard Inc . The lawsuit was brought by thousands of retailers who alleged the credit card companies fixed fees that are charged to merchants every time their customers made use of their debit or credit cards. Additionally, the lawsuit claimed that Visa and Mastercard prevented merchants from informing customers about other forms of payments that were considerably cheaper.

The judge' approval came amidst objections from literally thousands of retailers who were complaining that this amount was inadequate. It is believed that this settlement is the largest in any United States antitrust class action.

The class action was initially brought against Visa, then Mastercard in 2005, with both companies accused of fee fixing. A fairness hearing was held in September. The original settlement amount was $7.2B but was reduced to $5.7B after thousands of merchants dropped out of the settlement deal. This settlement provides for cash-payments to merchants across the country and also permits then to start charging customers and additional fee whenever a Master or a Visa card is used.

The National Retail Federation' general counsel, Mallory Duncan said in a statement that his organization which had opposed this deal was now reviewing the ruling that they are expecting to file an appeal.