Amazon not only sold $2.5 billion worth of goods, it introduced Prime members to new services. How should rivals compete in 2017?
Retailers file an antitrust suit that challenges a settlement Visa and MasterCard agreed to earlier.
Target Corp. and more than a dozen other retailers filed suit in U.S. District Court yesterday claiming Visa Inc. and MasterCard Inc. have violated antitrust laws. At issue are the interchange, or swipe, fees credit-card and debit card-issuing banks charge retailers for each credit card transaction. The retailers claim the payment card firms illegally restrained competition, forcing the retailers to pay higher swipe fees.
The suit challenges a $7.25 billion swipe fee reform settlement agreed to by major payment card networks and payment card issuers last year. Many retailers, including Target, were party to the original settlement but have since dropped out, saying the settlement rules give the payment card networks too much leeway to raise future rates.
The National Retail Federation trade group, which is not party to either suit but has said it objects to the proposed settlement, estimates merchants pay about $30 billion in credit card swipe fees annually. When a consumer pays with a credit card, credit card issuers charge the merchant an average of 2% to 3% of the value of that transaction. Different, higher fees are typically charged for card-not-present transactions, the payment method common for online purchases, because they are considered more risky.
The suit, Target Corp. vs. Visa Inc., was filed in U.S. District Court in the Southern District of New York. Macy’s Inc., TJX Cos. Inc., Kohl’s Corp., Staples Inc., J.C. Penney Co. Inc., Office Depot Inc., L Brands Inc., Office Max Inc., Big Lots Stores Inc., Abercrombie & Fitch Co., Ascena Retail Group Inc., Saks Inc., Bon-Ton Stores Inc., Chico’s FAS Inc., Luxottica Group SPA and American Signature Inc., are also plaintiffs.
Visa and MasterCard, which are also named in the suit, did not immediately respond to inquiries.
The deadline for merchants to object or exclude themselves from the settlement announced last year is May 28. Other major retailers that have opted out of the proposed settlement include Wal-Mart Stores Inc., Costco Wholesale Corp., Gap Inc. and Lowe’s Cos.