Visa and Mastercard settle antitrust case, NY judge may reject the deal

The Foreign exchange brokersproposed $30 billion antitrust settlement by Visa and Mastercard, aimed at limiting merchants' credit and debit card fees, is now in jeopardy. A New York judge hinted that she is preparing to reject the agreement.

According to court records, U.S. District Judge Margo Brodie in Brooklyn told lawyers for the card networks and opponents at a Thursday hearing that she "might not approve this settlement."

She plans to write an opinion explaining her decision and reasons.

Both card networks expressed disappointment. Mastercard called the settlement a “fair solution” that provides businesses more flexibility in managing card transactions, while Visa labeled it an “appropriate resolution” for the nearly 19-year-old case.

The settlement, announced on March 26, aims to resolve most lawsuits nationwide, with over 90% of settling merchants being small businesses.

Businesses have long complained that Visa and Mastercard charge excessively high swipe fees or interchange fees to process credit and debit card payments and unlawfully prevent them from steering customers to cheaper payment methods.

According to the Merchants Payments Coalition, which represents retailers, grocers, convenience stores, and gas stations, swipe fees totaled $172 billion in 2023 and more than doubled over the past decade.

Under the settlement, the average swipe fees of 1.5% to 3.5% would drop by at least 0.04 percentage points over three years. Visa and Mastercard also agreed to cap rates and remove no-steering provisions for five years.

Opponents include the National Retail Federation, the world's largest retail trade organization.

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