Wal-Mart Sues Visa for $5 Billion over Card Swipe Fees
March 28, 2014 3:08 PM EST
Wal-Mart Stores Inc (WMT.N) this week sued Visa Inc (V.N) for $5 billion, accusing the credit and debit card network of excessively high card swipe fees, several months after the retailer opted out of a class action settlement between merchants and Visa and MasterCard Inc (MA.N).
Visa and other card networks charge retailers fees, called swipe fees or interchange fees, each time a shopper uses a debit or credit card to pay.
In December, a federal judge in Brooklyn, N.Y., approved a $5.7 billion class action settlement between merchants and Visa and MasterCard despite the objections of thousands of retailers that complained it was inadequate.
Those businesses complained about a broad litigation release in the settlement. The release forces all merchants who accepted Visa or MasterCard, and those who will in the future, to give up their right to sue the credit card companies over rules at issue in the case or similar ones they may make in the future.
Wal-Mart, the world's largest retailer, is seeking damages from price fixing and other antitrust violations that it claims took place between January 1, 2004 and November 27, 2012.
In its lawsuit, Wal-Mart contends that Visa, in concert with banks, sought to prevent retailers from protecting themselves against those swipe fees, eventually hurting sales.
"The anticompetitive conduct of Visa and the banks forced Wal-Mart to raise retail prices paid by its customers and/or reduce retail services provided to its customers as a means of offsetting some of the artificially inflated interchange fees," Wal-Mart in court documents.
"As a result, Wal-Mart's retail sales were below what they would have been otherwise."
When asked whether Wal-Mart would file a suit against Mastercard, a spokesman for the retailer said the company would not discuss its litigation plans publicly.
Wal-Mart contends that that the way Visa set swipe fees violated antitrust regulations and generated more than $350 billion for card issuers over the nearly 9-year period in question, in part at the expense of the retailer and customers.
The case is in re: Wal-Mart Stores, U.S. District Court, Western District of Arkansas, No. 05101.
Most Popular Slideshows
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- 2014 MLB World Series Game 3: Kansas City Royals 3, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Tesco Facing Crisis After Chairman Quits Citing Accounting Scandal In The Retail Giant
- #Snapgate: iPad Air 2 Breaks While Undergoing Bend Test
- Australian Federal Court Fines Reebok $350,000 & Orders Refunds For Shoe Endorsed By Miranda Kerr That Claims Unproven Health Benefits
- Perth Call Centre Staff Bad In English And Not Philippine And Indian Counterparts, Telstra Boss Says
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- Verizon Motorola Droid Turbo Leaked Live Images Surfaces, Scheduled To Get Unveiled On Oct 28
- Update HTC One M7 with LG G2 with Android 4.4.2 as Sprint OTA: Fixes and Installation
- U.S. Targets Buyers of ISIS Oil, Threatens Sanctions
- ISIS Syria Airstrike Bombing Has Killed 550 People, Civilians Included
- Russia Blocking OSCE Monitoring Of Its Border With Ukraine
- Russia Slams US 'Double Standards' In The Fight Against ISIS