Little Rock, Arkansas and Oakland, California objected to a multibillion-dollar settlement of a price-fixing case against Visa Inc. and MasterCard Inc. over the fees charged to merchants to process credit-card transactions.

The cities claim the settlement doesn’t address future price-fixing of the so-called interchange, or swipe fees, according to documents filed May 15 in Brooklyn, New York, federal court, where the deal is under review.

In its objection, Oakland said the accord “explicitly permits Visa and MasterCard to continue to fix interchange fees for their banks,” forcing consumers to pay higher prices.

The settlement also imposes “unacceptable obligations” on merchants and other entities that accept cards, Little Rock City Manager Bruce T. Moore said in a filing May 15.

The proposed $7.25 billion settlement, estimated to be the largest-ever U.S. antitrust accord, has drawn criticism from trade associations and some retailers, which contend that it grants the card companies too much leeway to raise rates in the future and doesn’t provide enough benefits to merchants.

Large retailers such as Wal-Mart Stores Inc., Target Corp. and Home Depot Inc. have spoken out against the deal. Trade groups including the National Association of Convenience Stores and the National Restaurant Association have also started a website,, which directs business owners to a page where they could file objections electronically.

Oakland said in its filing that the city’s residents, more than 20% of which are in poverty, would have to pay higher prices if interchange fees continue to rise.

“Because Oakland is not permitted to charge convenience fees, this hidden and regressive tax has fallen equally on those who make so little money that they cannot qualify for a credit card,” the city said in its objection, filed by attorney Jeffrey Shinder, who is also representing trade associations that oppose the settlement.

Little Rock, the state capital and home to department-store chain Dillard’s Inc., provided no detailed reasons for opposing the deal beyond points made by other objecting groups.

Moore, Little Rock’s city manager, didn’t immediately return a call or e-mail seeking further comment. Bentonville, Arkansas-based Wal-Mart Stores Inc., the world’s largest retailer, said in a statement in July that it was “disappointed” in the settlement and would encourage all merchants to reject the deal.

Randy Hargrove, a spokesman for Wal-Mart, declined to comment further on the company’s position on the settlement.

Hundreds of objections, primarily by smaller retailers and merchants, have been filed since U.S. District Judge John Gleeson gave a preliminary sign-off to the deal in November.

Last month, Gleeson ordered that corrections be made to websites established by groups opposing the settlement, including The judge said that the sites were misleading and failed to prominently display a link to a court-approved website,

At a follow-up hearing earlier this month, Gleeson said he would consider remedies for merchants that dropped out of the settlement, leaving them unable to receive payments for damages, based on what he described as misleading information on the sites.

The settlement was unveiled in July after about seven years of litigation. A hearing on final approval of the deal, which would cover merchants throughout the U.S., is scheduled for Sept. 12.

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