Merchant Group Websites Post Swipe-Fee Notices
Published in CSP Daily News
NACS, other retail associations comply with judge's ruling over 'misleading' information
ALEXANDRIA, Va. -- Facing the threat of a contempt of court charge, merchant groups opposed to the pending $7.25 billion class-action settlement involving Visa Inc. and MasterCard Inc. over interchange or "swipe" fees are complying with a federal judge's ruling to post notices on their websites indicating that some of the information posted there on the issue may be misleading.
Judge John Gleeson of the U.S. District Court in Brooklyn in mid-April said that merchant groups involved in the case must correct information on websites intended to encourage retailer opposition to the class-action settlement.
In late April, he wrote in a court order that the sites continue "to obfuscate the important differences between opting out and objecting" to the settlement and "[fail] to adequately inform a visitor to the site of the consequences of opting out." He ordered them to post notices to that effect.
As reported in a Raymond James/CSP Daily News Flash on Thursday, this week, several industry associations with a stake in the issue--including NACS, the National Grocers Association, the National Community Pharmacists Association and the National Cooperative Grocers Association, posted this or a similarly worded notice on their sites:
"United States District Court Judge John Gleeson, who is presiding over In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, has ruled that this website and others like it posted certain information regarding the settlement of that case that was misleading. Additional information as to class members' rights and options under the settlement is available at www.paymentcardsettlement.com."
"The notice was posted to comply with the order from the judge and it went up shortly after we received that order," NACS spokesperson Jeff Lenard told CSP Daily News. "It will stay up as long as required by the court."
MerchantsObject.com, a website created to oppose the settlement and to disseminate information supporting that view, posted this notice:
"Advisory: Judge Gleeson, the United States District Court Judge presiding over In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, has determined that certain information regarding the settlement previously displayed on this website, and others like it, was misleading.
"As a result, Judge Gleeson has ordered that this website post this advisory. This is not the Court-approved Case Website. The Court is concerned, for example, that some class members who visited this site may not have fully understood their rights with regard to the proposed settlement and therefore may have made decisions without complete information. For information such as the Court-approved Notice, which provides a detailed description of the proposed settlement and class members' rights and options in connection with the proposed settlement, please visit: www.paymentcardsettlement.com. Judge Gleeson recommends that you visit that site before deciding what action, if any, you wish to take regarding the settlement. You may also want to contact the attorneys appointed by the Court to represent the interests of the Class."
The pending settlement would end litigation filed in 2005 against Visa, MasterCard and several large banks that issue the payment networks' credit cards by merchants and several trade groups. The plaintiffs alleged that Visa, MasterCard and the banks conspire to set transaction fees that retailers pay at arbitrarily high levels. The fees are set by Visa and MasterCard but collected by the banks that issue their cards each time a customer makes a purchase.
The merchants also alleged the defendants have limited their ability to drive down costs by forcing them to abide by rules that have prevented them from surcharging customers who pay with credit cards.
Under the settlement, announced last July, the defendants have proposed paying $6.05 billion to a class of eight million merchants and temporarily reducing interchange fees by an amount equal to $1.2 billion. In addition, Visa and MasterCard agreed to drop their bans on surcharging, a change that took effect in January and allows merchants to add an extra fee to customers who pay with a credit card.
The deal has sparked opposition from large merchants such as Wal-Mart Stores Inc., Target Corp. and Home Depot Inc., as well as several trade groups that are named plaintiffs in the litigation. They argue the deal grants overly broad releases from future litigation to Visa and MasterCard and will not prevent interchange fees from rising in the future.