NEW YORK — A San Diego pizzeria has filed a proposed class-action lawsuit against Visa, Mastercardand five major banks, alleging they conspired to inflate credit card transaction fees charged to merchants, and alleging that it and millions of other merchants are being left out of the huge settlement the two card processors have recently reached in a decades-long lawsuit.
The Pizza Standard filed the suit in federal court in Brooklyn, naming Bank of America, Capital One, Chase Bank, Citibank and Wells Fargo alongside the two card networks.
The restaurant alleges the companies’ practices have cost merchants hundreds of billions of dollars and continued despite earlier litigation over credit card fees, according to Courthouse News, which added the complaint goes on to state, “This case challenges a massive, ongoing conspiracy between Visa, Mastercard, and the nation’s largest banks to artificially inflate the fees that merchants pay on every credit card transaction,” the complaint states.”
Claims Follow Earlier Settlement
The lawsuit seeks compensation for merchants whose transactions fall outside an earlier settlement covering purchases made before Jan. 24, 2019.
A federal judge approved that settlement in 2019, and the 2nd U.S. Circuit Court of Appeals affirmed it in March 2023, Courthouse News reported. The litigation underlying the agreement began in 2005.
The Pizza Standard said it began accepting Visa and Mastercard credit cards in 2021 and therefore did not qualify for compensation under the settlement. Its complaint argues that millions of merchants have been left without compensation for alleged harm suffered since January 2019.
Interchange And Network Fees Challenged
Merchants pay interchange fees on credit card transactions, along with network fees and other charges. The pizzeria alleges those costs would be substantially lower without coordination among Visa, Mastercard and the banks issuing their cards.
The complaint also points to the banks’ issuance of cards for both networks, alleging the institutions collectively account for the vast majority of cards issued and help reinforce the challenged practices.
The restaurant is asking the court to find the defendants liable for antitrust violations and award damages to the proposed class.
Representatives of Visa, Mastercard and the banks did not immediately respond to Courthouse News’ requests for comment.
