The “battle” between merchants and the Minnesota Twins is in the sixth or seventh inning in their fight with Visa and MasterCard over high transaction fees.
The baseball team and other companies—two recent, heavyweight players taking on the card networks—accuse the companies of violating antitrust laws by fixing inflated fees that merchants must pay when they accept customers’ credit cards.
Transaction fees (“swipe fees”) run about 2% of each purchase and were at the center of a prolonged antitrust class action among retailers, card networks, and issuing banks. In 2012, the case settled for a record $7.25 billion, and a federal judge ultimately approved $5.7 billion after thousands of dissatisfied retailers opted out of the damages portion of the deal.
On February 7, the Twins, along with Granite City Food & Brewery and JB Hudson Jewelers, filed a lawsuit in U.S. District Court in Brooklyn as part of a local group of opt-outs. The complaint does not specify how much the companies believe they are owed.
Kevin Smith, a Twins spokesman, described the lawsuit as “a technical matter to protect our interests.” He added, “Once we opted out, the legal system shifted the burden onto us to move forward to obtain a fair result. We’ll see what happens.”
Minneapolis antitrust attorney Vincent Esades, who represents the group, said the companies are essentially making the same case against Visa Inc. and MasterCard Inc. as the original antitrust class action. He estimated that “hundreds” of such cases have been filed in the wake of the settlement and expressed confidence the group will recover more in damages on its own than it would have as part of the settlement.
For his part, K. Craig Wildfang, the Minneapolis antitrust lawyer who quarterbacked the historic interchange-fee settlement for retailers, noted that outcomes for those who opted out and then litigated individually have been mixed. “They should plan on litigating their claims over the next several years,” Wildfang said.
