NEW YORK (AP) — The National Retail Federation is opposing a proposed $7.25 billion settlement that Visa Inc., MasterCard Inc. and major banks have agreed to pay retailers for alleged fee fixing.
The retail trade association said Tuesday that its board has given approval for it to go to court to try to block the settlement. The NRF, which is not a party to the lawsuit that led to the settlement, says it is unsure whether outside groups will be allowed to intervene, or if the case qualifies as a class action.
The NRF says it believes the proposed settlement will not stop swipe fees from continuing to rise, which will hurt both retailers and shoppers, and that it will prevent any future legal challenges.
The NRF represents more than 9,000 retailers of various sizes, including chain restaurants and industry partners, from the U.S. and 45 countries overseas.
"The settlement was by the credit card companies and for the credit card companies. This will not help merchants or customers," said Mallory Duncan, senior vice president and general counsel for NRF.
NRF's action comes as other retailers including Wal-Mart Stores Inc. and Target Corp., who are not part of the settlement, have previously spoken out against the settlement. And several trade groups who were involved in the suit, including the National Association of Convenience Stores, have vowed to fight the settlement. The convenience store group doesn't think the deal adequately addresses the issue of how much control Visa, MasterCard and banks have over merchants.
Duncan said NRF would be in the best position to block the pact, since it is the only trade group that represents the entire spectrum of the retail industry. But the trade group faces a big challenge, said Anthony Michael Sabino, a professor at St. John's University's Peter J. Tobin College of Business. He is also a partner in law firm Sabino & Sabino, which focuses on complex federal litigation.