|[November 09, 2012]
NRF Tells Judge Proposed Swipe Fee Settlement 'Benefits No One'
WASHINGTON --(Business Wire)--
Lawyers representing the National Retail Federation and many of the
nation's most prominent retail companies are set to appear in court
today to ask a federal judge to reject a proposed class-action
settlement of an antitrust lawsuit over the $30 billion a year in credit
card swipe fees charged by Visa and MasterCard (News - Alert).
"This proposal benefits no one but lawyers and credit card companies,
and should not be forced on the retail industry or retailers'
customers," NRF Senior Vice President and General Counsel Mallory Duncan
said. "It's a morass of legal flaws, and rather than bringing about
reform it would only entrench the anticompetitive behavior of the card
companies while putting them beyond the reach of the law. It should be
rejected on its face."
A hearing on a motion for preliminary approval of the proposed
settlement is scheduled for 11:30 a.m. before U.S. District Court Judge
John Gleeson in Brooklyn, N.Y. Gleeson will hear arguments on a brief
filed last week by NRF, 17 retail and restaurant companies and two other
trade associations. NRF is not a party to the lawsuit, but its members
and the companies named in the brief would be affected if the case is
approved as a class action. Arguments will also be heard on briefs filed
by other opponents, including retailers and associations who were
parties to the suit but who have rejected the proposal.
NRF argued in its brief that the settlement cannot legally be certified
as a class action because it attempts to forc a one-size-fits-all
solution onto a wildly diverse group of merchants. NRF also argued that
a provision barring all retailers - including those who opt out of the
settlement and even those who do not yet exist - from filing future
lawsuits over swipe fees is impermissibly broad under federal law. In
addition, the proposal allows retailers to reject payments offered as
compensation for past price-fixing but gives no mechanism to opt out of
flawed injunctive relief that would allow card companies to continuing
price fixing and fee increases in the future.
NRF opposes the settlement because it fails to reform the cartel-like
system where Visa and MasterCard set a rigid schedule of swipe fees that
all banks follow. It does nothing to disclose the hidden fees or
otherwise create transparency that would encourage competition that
would lead to lower fees. Merchant bargaining groups could be
recognized, but that is no change from current law. And while some
merchants would theoretically be given the right to surcharge as a
bargaining chip to hold down fees, the provision is subject to a wide
variety of card company restrictions, would be illegal in 10 states, and
ignores the goal of merchants to reduce prices paid by their customers.
As the world's largest retail trade association and the voice of retail
worldwide, NRF represents retailers of all types and sizes, including
chain restaurants and industry partners, from the United States and more
than 45 countries abroad. Retailers operate more than 3.6 million U.S.
establishments that support one in four U.S. jobs - 42 million working
Americans. Contributing $2.5 trillion to annual GDP, retail is a daily
barometer for the nation's economy. NRF's Retail
Means Jobs campaign emphasizes the economic importance of retail and
encourages policymakers to support a Jobs,
Innovation and Consumer Value Agenda aimed at boosting economic
growth and job creation. www.nrf.com
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