Target, Supervalu Differ on $7.25B Card Settlement
Opposition is reportedly mounting over a proposed $7.25 billion settlement that credit-card companies and banks agreed to in July in a major antitrust dispute involving credit-card processing fees that they charge merchants—and two of Minnesota’s largest retailers are on different sides.
While Minneapolis-based Target Corporation was one of the first retailers to oppose the plan, Eden Prairie-based Supervalu, Inc., is among those that support it, according to a report by CNN Money.
The news outlet reported that some retail advocates are hailing the proposed deal as a hard-won victory against the deep-pocketed credit-card industry, but others argue that it doesn’t go far enough and plan to fight its approval in court.
In a 2005 lawsuit, a group of merchants claimed that Visa, MasterCard, and other large financial firms engaged in anti-competitive practices and fixed prices when setting interchange fees—the fees retailers pay to banks to process the credit card transactions made by their customers.
The proposed settlement is still pending approval from a judge, but it calls for approximately 7 million merchants to split $6.05 billion in damages and receive an eight-month reduction in the fees—a discount that’s valued at roughly $1.2 billion.
The retailers opposing the deal say it doesn’t change the dynamics of credit-card processing and leaves Visa and MasterCard with the power to increase rates unchecked, according to CNN Money. They are reportedly also unhappy about losing the ability to sue over swipe fees later on if the deal is approved.
Lawyers are still hammering out technical details of the settlement, which will likely be submitted for preliminary approval by Friday, CNN Money reported. Those with objections will have 30 days to comment, and a hearing on the issue is expected in December.
Target is Minnesota’s second-largest public company based on revenue, which totaled $68.5 billion in its fiscal year that ended in January. Supervalu, meanwhile, is the state’s fourth-largest public company; its sales totaled $36.1 billion for the fiscal year that ended in February.
Minneapolis-based Robins, Kaplan, Miller & Ciresi L.L.P., was one of three law firms appointed by the U.S. District Court in New York to represent approximately 7 million individuals and businesses in the class-action lawsuit. St. Louis Park-based Traditions Classic Home Furnishings was among the original plaintiffs in the lawsuit, which grew to encompass millions of retailers. Other Minnesota companies named as plaintiffs include St. Cloud-based Coborn’s, Inc., and Inver Grove Heights-based CHS, Inc.