On Friday, July 13, 2012, the parties announced they settled the lawsuit known as In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, Case No. 1:05-md-01720-JG-JO, pending in the United States District Court for the Eastern District of New York (Brooklyn) since October 20, 2005 (the “Settlement”). The Settlement is worth approximately $7.2 billion ($6.05 billion to be allocated among the merchants opting into the Settlement and $1.2 billion to be credited as interchange fee reductions for eight months following the execution of the Settlement).
The original case, filed by four trade groups representing thousands of merchants, alleged that Visa and MasterCard engaged in certain price-fixing practices by setting interchange fees at an excessive rate for credit card transactions. Interchange fees are fees assessed by the Visa and MasterCard payment networks and paid by merchants to the financial institutions issuing the credit cards. Interchange fees have various categories, depending on the type of merchant, type of transaction, risk involved, etc., and have long been a source of complaint among merchant groups.
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