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A San Diego pizzeria has filed a proposed class action accusing Visa, Mastercard and five major banks of suppressing competition over fees merchants pay on card transactions. The allegations have not been proven, and the case seeks to cover U.S. merchants that accepted the networks’ cards from Jan. 25, 2019, until the alleged effects end.
A San Diego pizzeria has filed a proposed class action against Visa, Mastercard and five major banks, alleging they used rules that limited competition and kept fees merchants pay on credit-card transactions artificially high. The claims are allegations in a 134-page complaint; the source report does not describe a court finding on their merits.
The lawsuit names Bank of America, Capital One, Chase Bank, Citibank and Wells Fargo alongside the two payment networks. It alleges that the companies have worked together for decades to set uniform schedules of interchange fees—charges merchants pay to banks that issue credit cards when customers use those cards. The complaint describes the fees as effectively non-negotiable.
The plaintiff says network rules require merchants that accept any Visa or Mastercard credit card to accept all cards carrying that brand, regardless of the fees attached. It also alleges that merchants have been restricted from directing customers toward cheaper payment methods, including through surcharges tied to a particular card. According to the complaint, those practices limit competition among issuing banks and networks.
The filing also challenges fees charged by Visa and Mastercard for operating their networks, alleging these add to merchants’ costs. It says merchants now pay more than $100 billion annually in fees to accept the networks’ credit cards. That figure is presented in the complaint; the source report does not provide an independent assessment or further methodology for it.
How Card Fees Affect Merchants
If the allegations are upheld, the case could affect how card networks and issuing banks set fees and how much flexibility merchants have when choosing which payment methods to accept. Merchants commonly pay fees when customers use credit cards, so the sums can influence operating costs across businesses that take these payments.
The requested class could include individuals, businesses and other entities in the United States that accepted Visa- or Mastercard-branded credit cards from Jan. 25, 2019, until the alleged anticompetitive effects cease. The proposed case would therefore extend beyond the pizzeria that brought it, if a court certifies the class and the lawsuit proceeds.
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Earlier Card-Fee Settlements
The complaint follows years of litigation over merchant credit-card fees. According to the source report, a court approved a settlement in December 2019 that provided more than $5 billion in monetary relief to merchants. That settlement addressed claims for a class period ending Jan. 24, 2019, and did not cover the period targeted by this new complaint.
A separate settlement seeking changes to network rules had been preliminarily approved, the report says. The new complaint argues that any benefits from those changes would apply prospectively, while merchants would receive no compensation through that settlement for fees paid from Jan. 25, 2019 onward. Those descriptions reflect the plaintiff’s account of the earlier settlements and their scope.
““a deadweight toll on virtually every credit card purchase in America””
— The complaint
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Claims Await Court Review
The source report does not identify a ruling on the new complaint, a response from Visa, Mastercard or the named banks, or a schedule for upcoming proceedings. The defendants’ positions are not included in the supplied material. The allegations—including claims of coordination, anticompetitive restraints and inflated fees—remain unproven.
It is also unclear whether a court will certify the proposed class, what evidence will support the claims, or whether the case will be resolved through a settlement or proceed to trial. The scope and timing of any relief would depend on later court decisions and the outcome of the litigation.
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Court Decisions Will Set the Course
The case must proceed through court before the allegations can result in a judgment or relief. Among the developments to watch are responses from the defendants, any motions challenging the claims, and a decision on whether the proposed merchant class can be certified. The source report does not provide dates for those steps.
Any eventual recovery or change to payment-network rules would depend on the proceedings and any agreement approved by the court. Until then, the complaint’s account of merchant costs and the defendants’ conduct remains the plaintiff’s position.
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Key Questions
Who is being sued?
The proposed class action names Visa and Mastercard, along with Bank of America, Capital One, Chase Bank, Citibank and Wells Fargo.
What does the lawsuit allege?
The complaint alleges that the companies used rules and fee arrangements that limited competition and kept the charges merchants pay on card transactions high. These claims have not been proven in court.
Which merchants could be included?
The proposed class covers U.S. individuals, businesses and other entities that accepted Visa- or Mastercard-branded credit cards from Jan. 25, 2019, until the alleged effects of the conduct cease. A court would need to approve class certification.
How is this case different from the earlier settlement?
The source report says a 2019 settlement provided more than $5 billion for claims covering a period that ended Jan. 24, 2019. This complaint seeks relief for alleged conduct from Jan. 25, 2019 onward.
Have the defendants responded?
The supplied source material does not include responses from Visa, Mastercard or the banks, and it does not report a court ruling on the new lawsuit.
Source: hn
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