A proposed settlement of a merchants’ lawsuit over credit card fees that may cost Visa Inc., MasterCard Inc. and banks as much as $7.25 billion is probably worthy of approval, a federal judge said.
“I have reviewed the settlement agreement, and at first blush it appears to satisfy the requirements for preliminary approval,” U.S. District Judge John Gleeson in Brooklyn, New York, said in an order Oct. 24.
The order, containing Gleeson’s first public comments on the deal since it was unveiled in July, came in response to objections lodged by an expanding group of retailers and trade groups who contend it’s unfair.
Gleeson said he will hear arguments against a preliminary approval of the settlement on November 9. He declined a request to form a committee for objecting retailers and said there would be an opportunity for a more thorough discussion at the final approval stage.
The deal, intended to cover about 7 million retailers, would put an end to about seven years of litigation that has dogged Foster City, Calif.-based Visa and Purchase, N.Y.-based MasterCard. The suing merchants allege that banks conspired with the card companies to fix the so-called interchange fees that retailers are charged when customers pay with credit cards.
Some retailers and their trade associations have spoken out against the deal, contending it’s too generous to the card companies.
The order puts the settlement on track to be approved sooner than previously expected, K. Craig Wildfang, a lead lawyer for plaintiffs, said in a phone interview. Earlier, Wildfang and other attorneys involved in the case said they expected a hearing on approval of the deal to be held in December or early 2013.
“After seven years of negotiation and two years of mediation, this is the best possible settlement for all involved,” Trish Wexler, a spokeswoman for the Electronic Payments Coalition, a credit-and-debit-card industry trade group, said in an e-mail. “It’s time to end this epic battle, and put our differences to rest.”
The case is in In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 05-md-01720, U.S. District Court, Eastern District of New York (Brooklyn).