Visa, Mastercard, Major Banks Facing New Litigation Over ‘Anticompetitive’ Fees

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A San Diego pizzeria has filed a proposed class action accusing Visa, Mastercard and five major banks of using rules that suppress competition and keep merchants’ card fees high. The claims have not been proven; the lawsuit seeks to represent U.S. merchants that accepted the networks’ cards from January 25, 2019, onward.

A San Diego pizzeria has filed a proposed class action against Visa, Mastercard and five major banks, alleging they restrained competition and kept merchant credit-card fees artificially high after an earlier settlement covering transactions through January 24, 2019. The allegations are claims in a 134-page complaint and have not been established in court.

The complaint names Bank of America, Capital One, Chase Bank, Citibank and Wells Fargo alongside the card networks. It alleges the companies coordinated interchange-fee schedules: charges merchants pay to banks that issue credit cards. The suit characterizes those fees as effectively non-negotiable and says the defendants maintained rules that left merchants with limited ability to avoid higher-cost transactions.

Among the challenged practices, the complaint says merchants accepting one Visa or Mastercard credit card have been required to accept all cards on that network, regardless of the fees attached. It also alleges that restrictions on steering customers toward less costly payment methods—including surcharges tied to a particular card—have reduced pressure on banks and networks to compete on price. These descriptions reflect the plaintiff’s allegations, not court findings.

The suit says merchants now pay more than $100 billion annually to accept Visa and Mastercard credit cards. It also alleges the networks charge their own per-transaction and fixed network fees, adding costs on top of interchange fees. The complaint seeks to represent individuals, businesses and other entities in the United States that accepted Visa- or Mastercard-branded credit cards from January 25, 2019 until the alleged anticompetitive effects end.

Potential Claims for Post-2019 Fees

The filing seeks to address alleged merchant losses from a period the complaint says was not covered by the earlier monetary settlement. If the case proceeds and the plaintiff’s claims are upheld, it could create another route for eligible merchants to seek relief for later transactions. At this stage, however, there is no ruling that the defendants violated competition law, and no recovery has been awarded in this new case.

Card acceptance costs can affect businesses across many sectors because merchants pay fees when customers use credit cards. The complaint argues that limited ability to reject a network’s cards or steer customers toward cheaper options weakens merchants’ bargaining position. The scale of any recoverable losses, who would qualify for a class, and whether the case will be certified remain unresolved.

Earlier Settlement Ended in 2019

The complaint points to years-old multidistrict litigation over Visa and Mastercard merchant fees. According to the source report, a court approved a monetary class settlement in December 2019 that provided more than $5 billion in relief, but the covered class period ended on January 24, 2019. The new lawsuit focuses on transactions after that cutoff, alleging the conduct continued.

A separate settlement seeking changes to rules, rather than monetary compensation, had been preliminarily approved, the complaint says. The filing argues that any benefits from prospective rule changes would not compensate merchants for fees already paid after January 24, 2019. The status and eventual effect of that separate settlement are distinct from the claims in this new case.

““a deadweight toll on virtually every credit card purchase in America””

— The complaint, as quoted by ClassAction.org

Claims and Class Scope Remain Open

The allegations have not been tested in court, and the supplied report does not state whether the defendants have responded to this complaint. It is not clear whether a court will allow the case to proceed, certify a class, or agree that the alleged rules violate competition law.

The proposed class period is tied to when the alleged anticompetitive effects cease, but the complaint does not establish a final end date. The report also does not specify the damages sought in this new case or explain how the complaint’s annual fee estimate was calculated. Any effect of the separate rule-change settlement on this litigation remains unclear.

Court Review Will Set the Path

The next developments will depend on court proceedings, including any response from the defendants and decisions on motions challenging the claims. A court would also need to address whether the proposed class can be certified before the case could proceed on behalf of the broader group described in the complaint.

Until those steps occur, the case remains a set of allegations rather than a judgment or confirmed award. Merchants’ potential eligibility, the amount of any compensation and whether the challenged practices continue are not settled by the filing itself.

Key Questions

Who is being sued?

The proposed class action names Visa, Mastercard and Bank of America, Capital One, Chase Bank, Citibank and Wells Fargo.

What does the lawsuit allege?

The pizzeria alleges that the defendants used rules that weakened competition over merchant fees, including rules affecting which cards merchants must accept and whether they can steer customers to lower-cost payment methods. These claims have not been proven.

Which merchants could be included?

The complaint proposes a U.S. class of individuals, businesses and other entities that accepted Visa- or Mastercard-branded credit cards from January 25, 2019 until the alleged effects of the conduct cease. A court has not approved that proposed class.

Does the earlier settlement resolve this new case?

According to the complaint, the earlier monetary settlement covered transactions only through January 24, 2019. The new suit concerns later transactions, but its claims and any possible recovery remain subject to court review.

Source: hn