RILA rejects proposed interchange settlement

On April 11, 2013, the Retail Industry Leaders Association, which represents some of the largest retail companies in the United States, elected to opt out of and object to the proposed $7.25 billion class action settlement negotiated on behalf of 8 million merchant plaintiffs and defendants Visa Inc. and MasterCard Worldwide.

The proposed settlement would end retailers' pursuit of federal court claims that the card companies' interchange fee rules violate federal antitrust laws. The Federal Eastern District of New York court approved the preliminary settlement and scheduled a final settlement hearing for Sept. 12.

The RILA represents more than 200 retailers, product manufacturers and service suppliers. Its members report more than $1.5 trillion in annual sales and include such retail industry leaders as Lowe's Companies Inc., Target Corp., Best Buy Co. Inc., Sears Holdings Corp., The Home Depot Inc., and Wal-Mart Stores Inc.

Lack of future legal rights a problem

Deborah White, RILA Executive Vice President and General Counsel, said RILA members concluded the proposed settlement is a bad deal for retailers because it "undermines merchants' legal rights forever" and does not restrain the continued growth of card company interchange fees.

The RILA believes the proposed settlement would lock in the two card companies' "duopoly," provide no relief from interchange rate setting practices and rules, block retailers from bringing antitrust actions based on future alleged anticompetitive behavior of Visa and MasterCard, and limit innovation and competition in the marketplace.

The trade association's decision to object and drop out of the proposed settlement means RILA members are refusing any financial reward that would otherwise be available to them under the terms of the agreement.

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