(RTTNews.com) - Visa Inc. (V), Mastercard Inc. (MA) and some U.S. banks have agreed to pay $6.2 billion settle a class-action lawsuit over card swipe fees. The antitrust lawsuit was brought by U.S. retailers in 2005 over the fees they pay when they accept card payments.
The settlement, the largest ever of an antitrust case, is an amendment to the financial terms of the 2012 Class Settlement Agreement and will be filed with the court seeking approval.
In total, the defendants have agreed upon an additional payment of $900 million in the current agreement, following the $5.3 billion paid to merchants in 2012.
Merchants first brought the class-action suit in 2005 against Visa, Mastercard and the largest U.S. card-issuing banks, alleging violations of antitrust laws.
But many large merchants opted out of the original settlement of $7.25 billion that was reached in 2012 largely due to terms that would have barred them from filing lawsuits against the networks over future swipe-fee increases.
An appeals court invalidated that settlement on the grounds that merchants were not adequately represented. The Supreme Court last year declined to hear the case, shifting it back to the district court.
In a statement, Visa said Tuesday that it's share of the total settlement amount represents about $4.1 billion, which will be satisfied through funds previously deposited with the court plus the $600 million deposited by the company into its litigation escrow on June 28, 2018.
Visa added that no additional funds are required for this class settlement. The company's share is covered under its U.S. Retrospective Responsibility Plan created to insulate the company and class A shareholders from financial liability for certain litigation cases.
Mastercard said that in addition to the original 2012 monetary terms, its share of the financial agreement is an additional $108 million.
Mastercard had recorded a $210 million charge in its second-quarter 2018 financial statements, which will cover the financial obligation under this agreement and for estimated liabilities related to filed as well as anticipated opt-out merchant cases.
The remaining settlement amount will be paid by other defendants in the lawsuit, including Citigroup Inc. (C), J.P. Morgan Chase & Co. (JPM) and Bank of America Corp. ( BAC ).
Read the original article on RTTNews (http://www.rttnews.com/2936017/visa-mastercard-to-settle-retailers-class-action-suit-for-6-2-bln.aspx)
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