Payment Card Interchange Fee and Merchant Discount Antitrust Litigation
Berger Montague is co-lead counsel for a proposed class of merchants seeking damages under Rule 23(b)(3) of the Federal Rules of Civil Procedure. Plaintiffs allege, inter alia, that certain of Visa and MasterCard rules, including anti-steering restraints and default interchange fees, working in tandem have caused artificially inflated interchange fees paid by merchants on credit and debit card transactions from January 1, 2004 through the present (“the relevant period”).
Visa, MasterCard and several large banks who have played substantial roles in operating those networks are defendants in the case. However, the class includes all merchants who have accepted the above-referenced cards during the relevant period, without regard to whether they have dealt directly with any of the defendants. Plaintiffs allege that defendants have illegally fixed the interchange fee, which comprises the majority of (and serves as a floor for) the merchant discount fee. Merchants pay interchange fees to the card issuer’s bank pursuant to every credit or signature debit card transaction using a Visa or MasterCard payment card. Visa and MasterCard have effectively precluded merchants from avoiding interchange fees through a series of restrictive rules, which bind all Visa and MasterCard member banks, as well as all merchants who accept Visa and MasterCard payment cards. Plaintiffs seek monetary damages.
On September 18, 2018, Visa and MasterCard agreed to pay between $5.54 billion and $6.24 billion to settle the case. This is the largest-ever class action settlement of an antitrust case. The settlement was preliminarily approved on January 24, 2019.