More on MasterCard Settling 13 Year Wal*Mart Case

Earlier today, I posted that Visa has deposited a total of $4.8 Billion dollars over the past 15 months into their "Litigation Escrow Fund" which equivocates to $340,000,000 per month over the last 15 months.  Then I posted that  MasterCard has decided to pay off their antitrust lawsuit settlement early, for $335,000,000, thus saving $65,000,000.  Digital Transactions has a story on the settlement.  Here's an excerpt:

MasterCard Puts the 13-Year-Old Wal-Mart Case in the Rear-View Mirror


(July2, 2009) MasterCard Inc. plans to pay off its remaining $400 millionsettlement obligation to retailers over debit card acceptance early fora discounted $335 million, according to a filing the card network madeon Thursday with the Securities and Exchange Commission. Attorneys forthe retailer plaintiffs have signed on to the proposed deal, whichwould happen Sept. 30 if it gets the required court approval.

The casestarted in 1996 when retailers, upset about what they said was the highcost of accepting Visa- and MasterCard-branded signature debit cards,filed lawsuits challenging what were then the bank-owned cardassociations over their so-called honor-all-cards rules. The rulesrequired merchants that accepted Visa and MasterCard credit cards toalso accept the associations’ debit cards. The cases were consolidatedas a class action with more than 8 million plaintiffs and became knownas the “Wal-Mart case” because of the participation of Wal-Mart StoresInc., the nation’s largest retailer.

The cardassociations settled in 2003 for just over $3 billion—reportedly arecord—as the case was headed to trial in U.S. District Court inBrooklyn, N.Y. MasterCard’s portion called for payments into asettlement fund of $125 million by the end of 2003, followed by nineannual payments of $100 million. Visa’s initial payments of $225million were to be followed by annual payments of $200 million endingin December 2012. The card associations also agreed to drop theirhonor-all-cards rules and temporarily lowered signature-debitinterchange.

Continue Reading at Digital Transactions

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