Following Settlement Opt-Out, CVS Settles Over Swipe Fees
NEW YORK — Legal challenges against Visa Inc. and Mastercard Inc. continue to wind their way through the court system, this time with CVS Health settling its antitrust suit against the credit card companies.
The Woonsocket, R.I.-based drugstore chain filed the lawsuit after it opted out of the $7-billion settlement other retailers reached with Visa and MasterCard over credit card interchange fees, also known as swipe fees.
According to Law360, U.S. District Judge Margo K. Brodie approved a stipulation ending CVS' suit against Visa and MasterCard in the multidistrict litigation over the swipe fees it's charged. The stipulation, which was filed last month, said CVS had "fully settled all of its claims" against the credit card companies, but did not disclose the terms of the deal.
An attorney for CVS declined to comment on the terms. Representatives of Visa and MasterCard did not immediately respond to requests for comment.
In July 2012, Visa and MasterCard reached a roughly $7.25-billion settlement with retailers to bring to a close a 2005 swipe fee lawsuit alleging the credit card companies set rules allowing them to charge high interchange fees for merchants to accept processing of their credit and debit cards.
U.S. District Judge John Gleeson approved the settlement in 2013; however, several retailers decided to opt out of the deal. In 2014, he ruled that lawsuits filed by retailers who opted out of the settlement could proceed, as CSNews Online previously reported.
In a May 2013 complaint, CVS sought damages from Visa and MasterCard, claiming the credit card companies conspired with their member banks in order to charge excessive interchange fees, according to Law360. The credit card companies and their member banks then imposed restrictions on merchants in order to keep those fees high, CVS alleged.
In particular, the drugstore chain focused on rules that required merchants to accept all Visa and MasterCard cards and barred them from imposing surcharges or rejecting premium cards that cost more for retailers to process.
"Due to the anti-competitive merchant restraints, both MasterCard and Visa have been able to dramatically, and with impunity, raise the interchange fees that plaintiff and other merchants pay," CVS argued.