Last month, Wal-Mart Store Inc. confirmed that it would be settling a lawsuit against Visa Inc. The news of this lawsuit settlement over EMV debit card transaction routing was announced just days after these two giants settled lawsuits filed back in 2005 over massive (and still ongoing) credit card interchange litigation.
This lawsuit began in 2016 when Bentonville, Ark.-based Wal-Mart sued Visa over the routing of transactions on the new Visa EMV chip cards. The accusation? Wal-Mart claimed Visa was trying to subvert its preference for routing EMV debit transactions on lower-cost Pin-debit networks. Instead, promoting signature transactions routed over Visa network.
Visa denied this accusation, and Wal-Mart gave no further details on the pending settlement. The only other information provided was simply that both companies were waiting on the judge overseeing the case to sign-off. In the meantime, papers filed concerning the credit card interchange litigation are awaiting dismissal in U.S. District Court in Brooklyn, N.Y.
In a statement to Digital Transactions News, a Visa spokesperson said, “Visa is pleased to put these matters behind us and looks forward to continuing to work with Wal-Mart to serve our mutual customers.”
The “Opt-Out” Case
The federal lawsuit dropped by Wal-Mart has been referred to as its “opt-out” case. In March 2014, Wal-Mart sued Visa on the grounds that the payment card network was price fixing (along with other antitrust violations related to credit card interchange). This case was filed after Wal-Mart passed up its share of $7.25 billion in damages merchants won in a July 2012 settlement.
This class action – known as MDL 1720 – pitted merchants against defendants Visa, Mastercard, and several big banks. 7,000 merchants joined Wal-Mart in this decision; their reason being that the settlement was inadequate. Many chose to then pursue individual actions against the networks.
According to Digital Transactions, “A federal appellate court in June 2016 invalidated the entire MDL 1720 settlement, and the U.S. Supreme Court in March declined to hear the networks’ appeal of that decision. Now the case is back in the Brooklyn district court before Judge Margo K. Brodie, where some observers have predicted it could take years more to resolve.”
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