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In a letter to U.S. House of Representatives and Senate leaders, a coalition of retail trade groups discussed the reasons for the industry’s rising opposition to a proposed settlement of antitrust lawsuits filed by merchants against Visa, MasterCard and big banks.
“The proposed settlement, which was negotiated by Visa, MasterCard and lawyers purporting to represent the merchant community, is one-sided and preserves the very anticompetitive actions that were the genesis of the lawsuits,” the letter noted. “Quite simply, the proposed settlement is a bad deal for merchants and their customers. While the card networks and their representatives have suggested it is a fait accompli, the growing objections from the merchant community foreshadow the fight that lies ahead as Visa and MasterCard attempt to force the terms of the settlement on nearly 8 million merchants.”
Among the reasons cited in the letter for retailers’ opposition to the proposed settlement is that it entrenches the Visa/MasterCard duopoly, enables continued centralized price-fixing by Visa and MasterCard, allows the credit card companies to prevent merchants from seeking better deals and communicating openly with customers, bans merchants from opting out of restrictive new rules set forth in the proposal, gives Visa and MasterCard the ability to keep market forces from working by hiding prices, makes all current and future merchants forever surrender their legal rights, and limits emerging innovations that could bring meaningful competition to the marketplace, such as mobile payments.
In conclusion, the letter urged federal lawmakers “to reject the false claims from the card networks and their representatives. The proposed settlement does nothing to resolve the failures in the electronic payment market, and continued congressional involvement in these issues is imperative.”
Signers of the letter included the National Association of Convenience Stores, the National Association of Truck Stop Operators, the National Community Pharmacists Association, the National Cooperative Grocers Association, the National Grocers Association, the National Retail Federation and the Retail Industry Leaders Association, which also sent its own, separate letter to congressional leadership, noting that “[a] growing number of nationally recognized retail brands and industry trade groups opposes the proposed settlement because it does not meaningfully address the anticompetitive practices of Visa and MasterCard.”