A new legal dispute is unfolding between a group of New York merchants and payment giants Visa and Mastercard, with the businesses seeking to limit legal protections granted to the companies under a prior settlement over card fees.
The merchants filed suit Tuesday in federal court in Manhattan, while also asking U.S. District Judge Brian Cogan in Brooklyn to clarify the scope of a 2019 agreement that resolved earlier litigation over interchange fees. That earlier case resulted in approximately $6 billion being distributed to millions of U.S. merchants, according to a statement in the newly filed complaint.
At issue is whether that settlement shields Visa and Mastercard from more recent claims. The Brooklyn court continues to oversee the 2019 deal, which covered conduct spanning roughly 15 years through early 2019. The new case, however, focuses on fees charged after that period, with plaintiffs alleging the companies have continued the same practices, per a statement in the filing.
The merchants argue that the prior agreement should not prevent them from pursuing damages tied to more recent transactions. According to a statement in their court papers, they are asking the judge to confirm that the release provisions in the settlement do not extend to their current claims.
“In effect, Visa and Mastercard sought to purchase through settlement a license to continue violating the antitrust laws—immunizing themselves from damages claims while they continued their same course of harmful conduct,” the complaint states.
Related: Visa and Mastercard Win Right to Appeal UK Ruling on Interchange Fees
The plaintiffs estimate that since 2019, the two networks have taken in hundreds of billions of dollars in card-related fees. They contend that allowing the earlier settlement to block new claims would effectively grant the companies years of protection from antitrust challenges, according to a statement in the summary judgment request.
The filing also highlights language in the 2019 agreement that the merchants say could be interpreted as protecting the companies from similar claims until August 2028, per a statement in the motion.
Attorney Jason Bressler, who represents the merchants, was blunt in his criticism of the arrangement. “If defendants wanted to stop being sued for violations of the antitrust laws, they should have stopped violating the antitrust laws,” he wrote in the lawsuit.
The judge’s decision on the summary judgment request could determine whether the new case proceeds, setting up a renewed legal battle over card fees and competition in the payments industry.
Source: Yahoo
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