Visa, MasterCard Reportedly Near Accord on Swipe Fee Lawsuit
According to Bloomberg, people briefed on the talks said news could come later this month -- and as earlier as late next week. The report added that talks have picked up recently and any settlement could include payments to retailers and a temporary cut in swipe fees added to each credit card transaction.
The legal battle dates back to 2005 when retailers alleged Visa and MasterCard violated anti-trust law by fixing swipe fees, which averaged 2 percent of the purchase price. The proceeds went to card-issuing banks and generated more than $40 billion a year for U.S. lenders, according to the news report.
The suit is set to go to before U.S. District Judge John Gleeson in Brooklyn, N.Y. in September. Any deal would avoid a trial.
Erica Harvill, a spokeswoman for San Francisco-based Visa, and MasterCard's James Issokson in Purchase, N.Y., declined to comment on the timing of the settlement. Lawyers for the plaintiffs including K. Craig Wildfang, of Robins, Kaplan, Miller & Ciresi LLP, and Bart Cohen, of Berger & Montague PC, declined to comment. Five other lawyers for the plaintiffs didn't immediately respond to e-mails and phone calls. One person said an accord make take longer than a week, according to Bloomberg.
Visa had $4.28 billion in uncommitted funds set aside to cover litigation at the end of March. MasterCard took a $495-million charge in the fourth quarter for its portion of a potential settlement, according to a statement. In February 2011, the defendants agreed that Visa would be responsible for two-thirds of any settlement and MasterCard would pay about one-eighth, the report added.