Walmart sues Visa over swipe fees

Walmart has launched a lawsuit against Visa for $5 billion, accusing the credit and debit card network of excessively high card swipe fees, several months after the retailer opted out of a class action settlement between merchants and Visa and MasterCard.

Visa declined to comment on the suit, filed Tuesday in the U.S. District Court for the Western District of Arkansas, where Walmart is headquartered.

Visa and other card networks charge retailers fees, called swipe fees or interchange fees, each time a shopper uses a debit or credit card to pay.

In December a federal judge in Brooklyn approved a $5.7 billion class action settlement between merchants and Visa and MasterCard despite the objections of thousands of retailers that it was inadequate.

Walmart, Amazon and Target were among those opting out of the monetary components of the settlement to have the freedom to seek damages on their own.

Those businesses complained about a broad litigation release in the settlement. The release forces all merchants who accepted Visa or MasterCard and those that will do so to give up their right to sue the credit card companies over rules at issue in the case or similar ones they may make in the future.

Walmart, the world's largest retailer, is seeking damages from price fixing and other antitrust violations that it claims took place from Jan. 1, 2004, through Nov. 27, 2012.

In its lawsuit, Walmart contends that Visa, in concert with banks, sought to prevent retailers from protecting themselves against those swipe fees, eventually hurting sales.

"The anticompetitive conduct of Visa and the banks forced Walmart to raise retail prices paid by its customers and/or reduce retail services provided to its customers as a means of offsetting some of the artificially inflated interchange fees," said Walmart in court documents.

"As a result, Walmart's retail sales were below what they would have been otherwise."

When asked whether Walmart would file a suit against MasterCard, a spokesman for the retailer said the company would not discuss its litigation plans publicly.

Walmart contends that the way Visa set swipe fees violated antitrust regulations and generated more than $350 billion for card issuers over the period in question, in part at the expense of the retailer and customers.

Reuters