Today, Tuesday 9/18/18, Visa and MasterCard agreed to settle, along with some large U.S. banks, a class action lawsuit brought by merchants over swipe fees that will see the card networks pay as much as $6.2 billion. The settlement ends a 13-year old suit brought by the 19 of the nation's leading merchants, which claimed that Visa and MasterCard violated antitrust laws by conspiring to fix fees charged to stores for handling credit card payments. It's the largest antitrust settlement ever. The suit had been settled before, but the original settlement reached in 2012 was rejected by major merchants as unfair and overturned on appeal. Opponents of the earlier agreement argued it would have limited the retailers' ability to bring future lawsuits and done little to end un-competitive practices.
The latest settlement is $900 million more than the previous one. Visa is paying $4.1 billion and Mastercard is paying about $900 million. The two companies say they've already set aside money to cover the payment.
Under the new deal, Visa will pay an additional $600 million, while MasterCard will pay an additional $108 million, according to the companies' filings.
MasterCard said it was an important step to finally reach an agreement with merchants in this case.
A time of reporting this article, Visa's stock was up 0.4% in pre-market trade and Mastercard shares gained 0.5%. Year to date, Visa shares have rallied 28%, Mastercard's stock has run up 43% and the Dow Jones Industrial Average DJIA, +0.67% has tacked on 5.4%.
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