[JURIST] A judge for the US District Court for the Eastern District of New York [official website] on Friday preliminarily approved a proposed settlement of $7.2 billion between merchants and Visa and Mastercard [corporate websites], which would be the largest settlement ever made in an antitrust case. This would end a seven-year class action against Visa and Mastercard alleging that they conspired with banks to fix the fees merchants pay when their credit cards are used. Although Visa and Mastercard representatives have said they are happy with the deal, some members of the merchant class, including Wal-Mart, Home Depot and Target [corporate websites] have expressed their opposition [Bloomberg report] to the settlement. The National Retail Federation [official website], which asked [brief, press release] the court earlier this month to reject the settlement agreement, said the proposed settlement “does nothing to keep these soaring fees from continuing to drive prices higher for American consumers, and would block merchants who believe in true swipe fee reform from ever having their day in court.” Although it survived preliminary approval, the settlement will still be subject to final approval by the court.

Earlier this year the European General Court [official website], the EU’s second highest court rejected [JURIST report] a challenge by MasterCard over its cross-border credit card fees. The court upheld a decision by the European Commission [official website] that the fees violate EU antitrust rules. In 2010 the US Department of Justice (DOJ) [official website] filed a civil antitrust lawsuit [JURIST report] against MasterCard, Visa and American Express [corporate website]. The lawsuit challenged rules utilized by the companies that prevented merchants from providing discounts and rewards for using credit cards with lower merchant fees. The DOJ contended that these rules unfairly inflate costs for both consumers and merchants. Visa and MasterCard agreed to a settlement that required the companies to allow merchants using their cards to express a preference for types of payments accepted, to offer discounts to consumers for using a particular card or type of payment and to provide consumers with information regarding the costs incurred by the merchant when a particular type of credit card is used. In 2008 Visa and Mastercard settled an antitrust suit [JURIST report] with Discover Financial Services [corporate website] for $2.75 billion. The settlement was the result of a 2004 lawsuit filed by Discover after a DOJ suit [opinion] determined Visa and Mastercard were in violation of section 1 of the Sherman Antitrust Act by prohibiting banks from using Discover’s services.