WASHINGTON – The retail lobby, which has turned back credit card giants Visa and MasterCard, as well as the banks and credit union in recent battles, on Thursday called on Congress to continue efforts to regulate the card networks, as the merchants fight to scotch the historic antitrust settlement with Visa and MasterCard.
In a letter to congressional leaders, a broad coalition of merchants, led by the National Retail Foundation, expressed its opposition to the $7.2 billion settlement, which they hope will be rejected by a federal court overseeing the case in New York.
“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,” said the group in letters to all 535 members of the House and Senate. “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 8 million merchants.”
The letter, which comes as final settlement terms are scheduled to be submitted to the court next month, was signed by the National Retail Federation, National Association of Convenience Stores, National Association of College Stores, National Association of Truck Stop Operators, National Community Pharmacists Association, National Cooperative Grocers Association, National Grocers Association, Retail Industry Leaders Association and Society of Independent Gasoline Marketers of America. All of the groups have publicly stated they will oppose the antitrust settlement.
The powerful coalition won a multi-billion-dollar antitrust case against Visa and MasterCard in 2003, beat the banks and credit unions in last year’s fight over debit interchange and is predicting it will convince the judge to reject the latest antitrust deal. “I think the settlement is in deep trouble,” Mallory Duncan, general counsel for the National Retail Federation, told Credit Union Journal yesterday. “It’s hard to say that there’s a settlement when so many parties repudiate it.”
Duncan said there is little Congress can do regarding the court settlement, but he expects the merchant groups to continue to fight the card companies and their bank and credit union partners over the fees charged retailers and suggested the issue may resurface in Congress with an attempt to cap credit card interchange next year. “Certainly the credit card market is broken and this settlement doesn’t do anything to fix it,” he said. “The focus will be on Congress if this settlement is approved.”