NEW YORK, Nov 1 (Reuters) - Nearly 1,200 retailers said on Thursday they will urge a federal judge to reject a proposed $7.2 billion settlement between merchants and Visa Inc and Mastercard Inc over credit card fees, calling it an ``unacceptable'' proposal that would strip away stores' legal rights.
The proposed settlement was submitted in October for preliminary approval by the court. If it receives first preliminary and then final approval, it would be the largest federal antitrust settlement in U.S. history, offering nearly 8 million merchants $7.2 billion in cash and temporary reductions in the interchange, or swipe fees, that stores pay to process credit and debit transactions.
Since it was first announced in July, the settlement has drawn a vocal chorus of opponents, including 10 of the 19 retailers and trade groups appointed to lead the litigation on merchants' behalf. Those opponents - which include the National Association of Convenience Stores and the National Restaurant Association - delivered a brief Thursday that asks U.S. District Judge John Gleeson to reject the proposal.
Nearly 1,200 other merchants said in court filings that they were unhappy with the deal and would submit multiple briefs expressing their dissatisfaction. They range from some of the best-known U.S. retailers, such as Wal-Mart Stores Inc and Ikea, to small businesses and major trade groups like the National Retail Federation.
``The declarations from about 1,200 merchants, small and large, from every corner of the country, and every type of merchant speak volumes about the fact that something is very seriously wrong with this deal,'' said Jeff Shinder, a lawyer representing the named plaintiffs opposing the deal.
Opponents said the settlement offers no meaningful reform to swipe-fee rates. They have also blasted litigation releases that would shield Visa and Mastercard from new lawsuits over swipe fees.
Visa, Mastercard and lawyers for stores that support the settlement have said they are confident that the deal will be approved by the court. In a brief order last week, Gleeson said that ``at first blush'' the proposal meets the legal threshold for preliminary approval, but he noted that the standard will be more stringent for final approval.
A hearing on preliminary approval has been scheduled for Nov. 9.