A federal appeals court has approved a settlement of a class-action lawsuit brought against Visa and Mastercard.
The settlement, in which the payment card networks agreed to pay a total of $5.6 billion to 12 million merchants who brought an antitrust case against them, was approved Wednesday (March 15).
In doing so, the court rejected an appeal by some who had objected to the settlement and said that a district court had made errors in certifying the class, approving the settlement, granting service awards and computing attorneys’ fees.
The action followed 15 years of litigation. In the lawsuit that led to the settlement, the plaintiffs alleged that Visa and Mastercard had injured the merchants by charging supracompetitive fees on payment card transactions.
Those who objected to the settlement and filed the appeal included a group of gas station owners who were in dispute with oil companies about who had been injured by the fees charged by Visa and Mastercard, Reuters reported Wednesday.
The court ruled that the dispute between these parties may have to be resolved in court, but that the payouts to other plaintiffs in the class-action lawsuit should not be delayed, the report said.
Related: Mastercard, Visa May Face New UK Class Action Suit Over Fees
The settlement resolves retailers’ claims that the payment card networks overcharged them on interchange fees and barred retailers from steering their customers toward other payment methods that did not charge fees, per the report.
The $5.6 billion settlement was approved by a court in 2019 after a $7.25 billion settlement approved by a different judge was voided by an appeals court 3½ years earlier because it gave insufficient consideration to some of the retailers, according to the report.
This decision comes about two months after Visa said in a Securities and Exchange Commission (SEC) filing that it is cooperating with a Justice Department investigation that is “seeking additional documents and information focusing on U.S. debit and competition with other payment methods and networks.”
The Justice Department’s antitrust arm began investigating Visa in 2021 for allegedly anticompetitive debit card processes. That includes determining whether Visa prevented retailers from sending debit card transactions through lower-cost card networks.
