The Networks establish the base fees. Typically the Merchant has a contract with their Acquirer (the company which processes card transactions for the Merchant) which defines their fees.The fee is shared by the Acquirer, the Issuer (Chase), and the Network (VISA). But, yes, if the fee is lower, or capped, the issuer receives less.

Why did Visa/MC agree to the settlement? The legal theory was questionable at best, since if they didn't like CC interchange fees they could go back to only accepting cash or debit, or even checks. Imagine if I complained that Rolex watches were too expensive and I'm being overcharged. I'd be told buy a Casio instead as a reasonable substitute and stop whining.

Why would consumers be fed up? If the EU experience has proved anything it's that capped fees were never about consumers, who saw not a cent of reduced prices despite a media campaign attempting to convince them to believe that would be their benefit, but about catering to producers who wanted to increase their profits. This was easily foreseeable of course, in the same way that tax credits for electric cars and air conditioners always inure to the benefit of the producer, never the consumer. If the government introduced a million dollar tax credit for new home insulation I guarantee the very next day it would cost a million dollars to reinsulate your house.

The risk is that a court would have sided with the class and demanded a huge amount of monetary and/or other relief (like determining that some of Visa/MC business practices were illegal and not allowed).

A settlement allows all parties to save face, compromise, and avoid the worst possible outcome on either end. Yes, Visa/MC could prevail in their entirety and the class could get told to suck it. Or Visa/MC have major parts of how they run their relationship and billing to merchants declared unlawful. Beyond the odds of prevailing, sometimes parties get bruised along the way with ugly, ugly, ugly content (emails, presentations, memos, etc.) found during legal discovery. This is why classes that don't get summary judgment dismissal are usually settled instead of companies chancing taking them to trial.

Your watch comparison falls flat because it's pretty easy for me to go to any of dozens of watch brands, buy a watch, and then use it anywhere to tell the time. The network has to be held by the cardholder on a product AND the merchant has to understand it. It'd be like if each watchmaker had a different readout of the time (not just styling, but functionally to understand the time displayed as if we're talking English vs. Spanish vs. Chinese as languages) and you had to be able to display the time to someone else with them being able to understand it. Imagine this scenario and then imagine if 90%+ of the watches were made by Citizen and Rolex.

If surcharging for card use ends up getting common and egregious enough, I can see consumers demanding some sort of action thinking that the surcharging might go away (or be dramatically reduced) if interchange dropped. The chances of that would probably be less if merchants actually followed the rules though (i.e. didn't surcharge for debit and stuck to the 1% max or whatever).

The over 9000 entry court docket for the class. Tons of defendants, tons of plaintiffs, tons of cases merged into this one for the purpose of hearing similar claims/expediting expert witness deposition and discovery, etc.

Other lawsuits by the 7-Eleven and Home Depot and Grubhub groups are attempting to be continued. Grubhub is trying to remand out their case from the settlement on the grounds of all mutual claims being addressed in the settlement and other claims deserving jury trial.

Several merchants plan to object to the proposed settlement with a schedule (as of now, subject to change, these things are frequently delayed by mutual agreement of plaintiff/defendant attorneys and the court) of April 26th for objections, replies to objections May 13th, and an in-person hearing with oral argument for preliminary approval of the proposed settlement on June 13th.

Again though - don't be surprised if these dates get pushed out.

So the talks on the settlement were held and, per the Wall Street Journal, the court is unlikely to approve the settlement. (Archive link if you hit a paywall.)

I can't say I'm surprised - merchants correctly called that this was a very temporary and limited concession by Visa/MC and postured they'd rather take their chances at trial.

The written decision by the judge is pending, but per the article a filing on the docket indicates the judge told the parties to the case she is unlikely to approve it.

Judge rejects Visa, Mastercard $30B settlement over controversial swipe fees

https://www.msn.com/en-us/money/comp...es/ar-BB1oSb2b

“The next step, presumably, is a trial”

So who came to the agreement - not the merchants and the card companies? (obviously, there a millions of merchants, so not all of them were possibly involved)

So going back a couple months, the judge posted an 88 page opinion on the rejection of Visa/MC's proposed settlement.

There was also this analysis.

Some key points on why the proposed settlement really didn't make sense for the plaintiffs (was not equitable/fair):

• The proposed relief, as discussed earlier here, is far far short of what the "best possible scenario" at trial would be. Visa/MC have tried time and time again to get the case dismissed via summary judgment and failed. This puts the plaintiffs in a strong position.
• The settlement inadequately represented the larger merchants in the class, with smaller merchants trading some relief at the expense of larger merchants. Larger merchants already negotiate custom interchange rates with the networks, so reductions on the standard rates do them no good.
• The proposed settlement allowed for 1% credit surcharging even if they didn't surcharge other cards. However, the larger retailer plaintiffs both operate in states that prohibit surcharging, and that accept American Express (which prohibits issuer level surcharging).
• Larger merchants want to take Visa/MC to court over "honor all cards" rules (e.g. that if you accept Visa, you can't say all visa except Signature/Infinite). The proposed settlement only allowed 120 day pilot programs at up to 20% of their national locations to do so.
• The proposed settlement also eliminated the "honor all wallets" rule for digital wallets, but it had an important carve out: Merchants would not be able to refuse Visa/MC issued cards in digital wallets made/operated directly by Visa/MC.
• The merchants gave expert testimony that interchange could be lowered by 100 basis points versus current in a competitive landscape (non-duopoly), which makes the four basis point reduction / 7 basis point average effective rate reduction paltry in comparison.
• The proposed settlement would have required Visa/MC to release Visa and MC from antitrust claims for five years, which the judge agreed was not fair. The judge also pointed out that Visa/MC are fine in markets like Canada and the EU where interchange is regulated far lower than the US, and that they could withstand a far great judgment at trial.

Where do we go from here?

Less than 1% of class actions ever go to trial. This case has been going on since the 2005. It stands closer to trial now.

The docket is a complete mess of complexity at over 9300 documents in sequence. Documents. Not pages. This also excludes exhibits/attachments within docket #s, which can also be multiple pages. Some third parties trying to attract merchants to file made misleading claims. Other merchants were not aware they could file without going through a third party. There's mailers to let potential merchants know if they're eligible. There's associated other lawsuits between merchants and payment processors. It is a quagmire. Some plaintiffs have other related lawsuits scheduled separately and don't want the class action trial to occur before their other trials (meaning they don't want it scheduled in April/May 2025). The Airbnb plaintiffs jointly dismissed their claims with prejudice in late July (meaning they can't go back and file claims over the same issue), suggesting they got some sort of relief from Visa/MC.)

There's also multiple parties that submitted fraudulent claims. Many used third parties for leads, and then these individuals either lied to merchants, or made up the lead (fake business, or saying a business agreed to be represented when they didn't.)

I expect to hear nothing for some time. This could go on for years to come, depending on the motions of different plaintiffs and defendant responses in turn...

A direct link to the PDF file.
https://storage.courtlistener.com/re...7.9342.0_3.pdf

Here is a link to the docket:

https://www.courtlistener.com/docket...unt-antitrust/

Those who are interested in the cases filed in federal courts should consider signing up for a free PACER (Public Access to Court Electronic Records) account with the federal judiciary.

https://pacer.uscourts.gov/register-account

One does need a credit card to sign up, since documents are priced at $0.10 per page, with a maximum of $3.00 per document. However, they are free when downloading 300 charged pages or fewer per calendar quarter.

I would encourage non-lawyers and lawyers alike with PACER accounts to also install the RECAP (PACER spelled backwards) extension in their browsers. This improvement by a non-profit organization creates a database of court documents for us all to access for free.

https://free.law/recap

Every time you download a PACER court document using the RECAP extension, a copy is uploaded to the RECAP website for future free open access to these public documents by all.

I am curious how such a case can actually proceed for 20 years. Lawyers and paralegals move on, and case knowledge gets lost along the way. What happens if the judge retires or dies? It would seem like a major, major effort to bring a new judge up to speed.

I guess I am glad IANAL