Merchants Lay Out Objections to Swipe Fee Settlement
NATIONAL REPORT -- In a letter to U.S. House of Representatives and Senate leaders, a coalition of retail trade groups lays out the reasons for the industry's rising opposition to a proposed settlement of antitrust lawsuits filed by merchants against Visa, MasterCard and big banks.
"The proposed settlement, which was negotiated by Visa, MasterCard and lawyers purporting to represent the merchant community, is one-sided and preserves the very anticompetitive actions that were the genesis of the lawsuits," the letter notes. "Quite simply, the proposed settlement is a bad deal for merchants and their customers. While the card networks and their representatives have suggested it is a fait accompli, the growing objections from the merchant community foreshadow the fight that lies ahead as Visa and MasterCard attempt to force the terms of the settlement on nearly eight million merchants."
Among the reasons cited in the letter for retailers' opposition to the proposed settlement is that: it entrenches the Visa/MasterCard duopoly; enables continued centralized price-fixing by Visa and MasterCard; allows the credit card companies to prevent merchants from seeking better deals and communicating openly with customers; bans merchants from opting out of restrictive new rules set forth in the proposal; gives Visa and MasterCard the ability to keep market forces from working by hiding prices; makes all current and future merchants forever surrender their legal rights; and limits emerging innovations that could bring meaningful competition to the marketplace, such as mobile payments.
In conclusion, the letter urges federal lawmakers "to reject the false claims from the card networks and their representatives. The proposed settlement does nothing to resolve the failures in the electronic payment market, and continued congressional involvement in these issues is imperative."
Signers of the letter include NACS, the Association for Convenience & Fuel Retailing, the National Association of Truck Stop Operators (NATSO), the National Community Pharmacists Association, the National Cooperative Grocers Association, the National Grocers Association, the National Retail Federation and the Retail Industry Leaders Association (RILA).
RILA also sent its own, separate letter to congressional leadership, noting that "[a] growing number of nationally recognized retail brands and industry trade groups opposes the proposed settlement because it does not meaningfully address the anticompetitive practices of Visa and MasterCard."
A copy of the coalition's letter in its entirety can be accessed by clicking here.