Mastercard and Visa: A 30-Year History of Legal Battles and Antitrust Lawsuits

by Vice Versa Victory

Over the last three decades, Mastercard and Visa have been at the center of numerous lawsuits, primarily revolving around antitrust violations, interchange fees, and market competition. These legal battles have shaped how these financial giants operate and have left a significant mark on the global payment industry. Let’s delve into some of the most notable cases.

1996-2003: The Wal-Mart Case – The First Major Blow

In 1996, a group of retailers led by Wal-Mart sued Visa and Mastercard, alleging that the companies forced merchants to accept their less popular debit cards as a condition for accepting credit cards—a practice known as "tying."

• Outcome: In 2003, the companies settled for $3 billion and agreed to unbundle debit and credit card services.

• Impact: This case marked one of the first significant antitrust settlements in the credit card industry and set the stage for future scrutiny of their business practices.

  
  

2005-2012: The Interchange Fee Class Action Lawsuit

Merchants claimed that Visa and Mastercard colluded with banks to fix the interchange fees charged on credit card transactions. This case expanded into one of the largest class-action lawsuits in U.S. history.

• Outcome: In 2012, Visa and Mastercard agreed to a $7.25 billion settlement, later reduced to $5.7 billion after some merchants opted out.

• Impact: The case shined a light on the complexity of interchange fees and pushed for greater transparency in fee structures.

  
  

2016-2023: European Antitrust Cases

The European Commission launched investigations into Visa and Mastercard over their cross-border interchange fees. These fees were deemed anti-competitive and harmful to merchants.

• Outcome: Both companies agreed to reduce their cross-border fees for non-EU cards, avoiding heavier penalties.

• Impact: These cases highlighted the global nature of interchange fee disputes and the growing regulatory scrutiny in international markets.

  
  

2018-2024: The $5.5 Billion Settlement for U.S. Merchants

In one of the most recent and significant cases, Visa and Mastercard faced allegations of overcharging U.S. merchants on swipe fees over a 15-year period.

• The Lawsuit: This case revisited interchange fees, claiming merchants had been unfairly burdened by excessive charges.

• Settlement: A $5.5 billion settlement was reached, with claims open to eligible merchants until February 4, 2025.

• Current Relevance: This settlement is one of the largest in history and offers a chance for businesses to recoup financial losses.

Recurring Themes in Litigation

Several recurring themes have emerged in these lawsuits:

1. Interchange Fees: A perennial issue, interchange fees have been a focal point of antitrust allegations.

2. Market Control: Both companies have faced accusations of monopolistic practices, often tied to their dominant position in the payment industry.

3. Transparency: Legal challenges have repeatedly called for more openness about how fees are calculated and implemented.

The Broader Implications

Visa and Mastercard’s legal history reflects the tension between innovation in the payments sector and regulatory oversight. As these companies continue to evolve, they remain under the watchful eye of regulators, merchants, and consumers.

For businesses, these lawsuits serve as a reminder to stay informed about changes in payment processing fees and potential avenues for restitution, like the ongoing $5.5 billion settlement.

Conclusion

The legacy of Visa and Mastercard's legal battles is one of innovation tempered by accountability. These cases have reshaped the payment industry and created opportunities for businesses to challenge unfair practices.

For eligible merchants, the current $5.5 billion settlement represents a significant chance to claim restitution for overpaid fees—a rare opportunity in a long history of legal skirmishes.

Want to know more about how your business can benefit from the current settlement? Contact Vice Versa Victory today to file your claim.