Judge Margo Brodie has hinted at the possibility of a larger settlement than the proposed $30 billion for Visa and Mastercard in a lawsuit related to high transaction fees. Given the financial resources of the two companies, Judge Brodie believes a significantly higher settlement can be reached.
The contested interchange fees the financial institutions impose affect over 12 million businesses. However, these fees are considered excessive, leading to this legal challenge.
Considering the projected expenditure from card issuers, the suggested annual savings may not be enough to offset the charges these firms could face. Judge Brodie has suggested this may lead to these companies needing to expand their cost-cutting strategies or find additional revenue sources.
However, despite these assertions, Judge Brodie stated that without the exact profitability information of Visa and Mastercard, any conclusions about their capacity to absorb a larger judgment remain speculative.
Hints at increased Visa, Mastercard settlement
She emphasized the need for more comprehensive financial data for a definitive conclusion.
The initial settlement proposed a marginal drop in standard transaction fees over three years, with a five-year cap on payments. However, Judge Brodie dismissed this proposal, as it did not provide the best outcome for businesses. A revised proposal with a more significant reduction was also rejected, as it did not meet long-term needs.
This antitrust case, dating back to 2005, could proceed to trial without a new, court-approved agreement. Trade groups and businesses are against the settlement, believing it won’t protect businesses from future excessive card fees and could suppress competition in the payments industry. The situation remains uncertain as efforts to reach an acceptable resolution continue.
