Visa, Mastercard $30 billion swipe-fee deal blocked by judge

By Paige Smith | Bloomberg

A federal judge in Brooklyn formally rejected a $30 billion settlement between Visa, Mastercard and retailers to cap credit-card swipe fees after telegraphing earlier this month that such a setback in the two-decade long litigation could be expected.

US District Judge Margo Brodie issued the ruling Tuesday, and ordered the parties to confer and respond to the ruling by June 28.

Brodie said at a hearing earlier this month that nothing she heard had changed her mind that the settlement should be approved. The settlement would have permitted retailers to charge consumers extra in transactions involving Visa or Mastercard credit cards, and allowed the merchants to adopt pricing tactics that steer consumers to lower-cost cards.

Following the June 13 hearing, the credit-card companies said they were disappointed by the judge’s stated intention to reject the deal. But some merchant groups applauded Brodie’s comments.

“We appreciate that there was recognition of the fatal flaws that would have made the settlement a bad deal for Main Street rather than a correction of credit-card industry violations of the antitrust laws,” Christopher Jones, an executive committee member of the Merchants Payments Coalition, said in a statement after the hearing.

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