Major Settlement Reached in Consolidated Interchange Fee Litigation

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On July 13, the parties to the long-running consolidated class action litigation against the two major payment network providers and 17 banks filed a proposed settlement to resolve allegations that the defendants unlawfully conspired to fix the fees that merchants are charged each time a customer uses a card for a purchase, so-called “swipe” or “interchange” fees. Class Settlement Agreement, In re Payment Card Interchange Fee & Merchant Discount Antitrust Litigation, No. 05-MD-1720 (E.D.N.Y. Jul. 13, 2012). In total, the settlement is valued at $7.25 billion. Of that total amount, roughly $6 billion would be paid to a class of millions of merchants and certain individual merchants. Another $1.2 billion of the total amount would be used to provide merchants with a temporary reduction in interchange fees. Further, the agreement allows merchants, for the first time, to apply a surcharge to customer transactions processed over the payment networks.

 


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