Key Takeaways
- The judge overseeing the massive credit card swipe-fee lawsuit reportedly is likely reject the agreement.
- The deal struck in March would have Visa and Mastercard reduce what they charge merchants to make card transactions.
- Critics said the plan didn’t go far enough to address antitrust issues.
Shares of Visa (V) and Mastercard (MA) edged lower in intraday trading Friday, a day after a federal judge reportedly threw cold water on a proposed $30 billion settlement of a long-running lawsuit charging big credit card providers of limiting competition through fees on merchants.
Court records from the Eastern District of New York seen by various media showed that Judge Margo Brodie explained that she is not likely to approve the agreement, noting the changes to it were inadequate.
Visa, Mastercard Had Agreed to Settlement in March
In the deal reached in March, the card companies agreed to lower fees they charge businesses to make credit card transactions. They also said they would not raise them until 2030.
However, critics opposed the plan, among them the Merchants Payments Coalition (MPC), a group of businesses that advocates for a more competitive and transparent U.S. payments system. The MPC noted it welcomed the comments from the judge, and Christopher Jones, an executive committee member of the MPC, added that the “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.”
If the judge does reject the settlement, the case would then go to trial, and Brodie reportedly agreed that should happen.
Neither company responded to Investopedia requests for comment, but Mastercard told The Wall Street Journal it “will pursue our options to ensure a proper resolution of this matter,” while Visa told the newspaper it continues “to believe that the proposed settlement agreement was the appropriate resolution resulting from lengthy and thoughtful discussions with the merchant class.”
Shares of Visa and Mastercard were both down less than 1% as of 11:30 a.m. ET Friday.