Visa and Mastercard have agreed to pay a combined $199.5 million to settle a nearly decade-old class action lawsuit brought by U.S. merchants, according to a proposed settlement filed on October 13 in federal court in Brooklyn. The agreement requires approval from Chief U.S. District Judge Margo Brodie. Merchants first sued the payment networks in 2016, alleging they violated antitrust laws by jointly changing chargeback rules in ways that forced businesses to absorb more costs tied to fraudulent transactions.
The lawsuit centered on changes that made merchants liable for chargebacks involving counterfeit, lost, or stolen cards if they had not upgraded point-of-sale systems to accept chip-enabled cards, while transaction fees remained unchanged. Under the settlement, Visa will pay $119.7 million and Mastercard will contribute $79.8 million. Two other defendants, Discover and American Express, previously agreed to pay a combined $32.2 million. All companies denied wrongdoing. Plaintiffs’ attorneys called the settlement “an excellent outcome for the class,” noting it represents about 13% of the plaintiffs’ best-case damages estimate and more than 50% of a conservative benchmark cited by defense experts.
This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.
