WASHINGTON — A large swath of U.S. retailers and several trade associations have risen up to oppose a $7.25 billion proposed settlement with Visa, MasterCard and major banks over interchange fees charged to merchants when consumers use credit and debit cards to make purchases.
Attorneys for about 1,200 merchants and trade associations filed separate briefs in U.S. District Court in the Eastern District of New York on Thursday and Friday, urging the court to deny preliminary approval to a proposed class-action settlement in a federal antitrust lawsuit that is pending before the court.
Among the retailers that joined the opposition in separate briefs were Target Corp., Macy’s Inc., Gap Inc., Limited Brands Inc., Wal-Mart Stores Inc., Saks Inc., Neiman Marcus Inc., Abercrombie and Fitch Co. and J.C. Penney Co. Inc.
Several retailers and trade groups filed an antitrust lawsuit against the major credit card companies and some major banks in 2005, alleging they use anticompetitive practices that cost merchants billions of dollars in fees. No discount and fashion firms were involved in that suit, though. The two sides reached a proposed settlement in July that would collectively pay merchants $7.25 billion and set new terms for interchange fees.
However, widespread opposition to the proposed settlement began to mount and hundreds of retailers are now banding together, urging the court to deny approval of the proposed settlement.
The Retail Industry Leaders Association said the proposed settlement “fails to address the anticompetitive practices that were the genesis for the lawsuits and denies merchants their right to challenge these practices ever again.”
Some of the original plaintiffs that signed the proposed settlement now reject it, in addition to the 1,200 merchants and retail trade groups, according to court documents.
“This group represents trillions in retail sales and a substantial portion of the putative class, and its massive and diverse breadth is a powerful signal that something is obviously wrong with this settlement,” said attorneys for Constantine Cannon LLP, representing a large group of merchants and trade groups, in one of the court briefs.
Sandy Kennedy, president of RILA, said, “The proposed class-action settlement is simply a bad deal for merchants.
“The volume and diversity of opposition to this flawed proposal is remarkable, and shows just how plainly unacceptable it is to those hurt most by Visa and MasterCard’s anticompetitive practices,” Kennedy said.
The National Retail Federation, which submitted a brief on behalf of 17 merchants, argued that the settlement should not be certified a class action because it “attempts to force a one-size-fits-all solution onto a wildly diverse group of merchants.”
“The proposal pending before the court does nothing to keep these soaring fees from continuing to drive prices higher for American consumers, and would block merchants who believe in true swipe-fee reform from ever having their day in court,” said Mallory Duncan, senior vice president and general counsel at the NRF. “While the remaining parties would like to treat preliminary approval as a routine procedural step, the court should recognize that this settlement is so legally flawed it cannot be tweaked into fairness.”
The NRF also argued that a provision in the settlement barring all retailers from filing future lawsuits over “swipe fees” is “impermissibly broad under federal law.”
Oral arguments regarding preliminary approval of the proposed settlement will be held in federal court in Brooklyn on Friday.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye