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NEW YORK -- It took seven years to reach a potential deal in the class-action suit over credit card swipe fees. However, it will take considerably less time for the deal to get its day in court.
U.S. District Judge John Gleeson in federal court in Brooklyn, N.Y., has scheduled a hearing on the proposed $7.2-billion settlement for Nov. 9. Retailers and trade associations who opposed the deal have until Oct. 31 to file their written objections with the court, according to Reuters.
Gleeson set the hearing date after he said the proposed deal between merchants and Visa Inc. and MasterCard Inc. appeared to meet preliminary approval. The proposed deal was submitted for preliminary approval on Friday, Oct. 19. If it receives first preliminary and then final approval, it would be the largest federal antitrust settlement in U.S. history, offering nearly eight million merchants $7.2 billion in cash and temporary reductions in interchange, or swipe fees, which stores must pay to process credit and debit transactions, the news agency said.
The legal battle dates back to 2005 when retailers alleged Visa and MasterCard violated anti-trust law by fixing swipe fees, which averaged 2 percent of the purchase price. The proceeds went to card-issuing banks and generated more than $40 billion a year for U.S. lenders, as CSNews Online previously reported.
The proposed settlement in the case was reached in July. However, since then several retailers -- some who are involved in the case and others who are not -- have raised objections to the deal. NACS, the Association for Convenience & Fuel Retailing, was the first to reject the settlement. The association, which is a class plaintiff in the lawsuit, said the agreement does not introduce competition and transparency into the credit card swipe fee market, as CSNews Online previously reported.
Jeff Shinder, managing partner with the law firm Constantine Cannon LLP who represents several of the named plaintiffs against oppose the deal, including the NACS, has said he plans to file a motion to deny preliminary approval, according to Dow Jones.
"The proponents of this settlement have done nothing to address the concerns of the increasing number of objectors to this deal," Shinder wrote in an e-mail Friday after co-counsel for the class filed for preliminary approval.