City Objects to Proposed Settlement of Massive Class Action Antitrust Lawsuit
OAKLAND, CA – Today the City Attorney of Oakland, CA filed an objection in US District Court of Eastern New York challenging the proposed settlement of a multi-billion dollar class action lawsuit against Visa and MasterCard, companies that illegally colluded to fleece millions of dollars from Oakland residents, taxpayers and businesses in recent years.
The lawsuit against Visa, MasterCard and major banks was filed in 2005 on behalf of about seven million merchants across the country, including cities such as Oakland and businesses such as Safeway. Plaintiffs accused the companies of engaging in illegal price fixing to charge unreasonably high fees for processing payments made with credit and debit cards.
Oakland is one of the first Visa and MasterCard customers in the country to object to the proposed multibillion dollar settlement of the Payment Card Interchange Fee & Merchant Discount Antitrust Litigation.
“We will not stand by and allow powerful financial institutions to fleece Oakland residents and taxpayers and reap obscene profits by flouting antitrust laws,” Oakland City Attorney Barbara Parker said today. “The proposed settlement offers only nominal financial damages to victims, and more importantly, it does nothing to force the companies to change their abusive practices. Oakland will still have to pay excessive fees to credit card companies when we should be able to use that money for essential programs and services like fixing our streets, cleaning up illegal dumping, maintaining Head Start and library services and providing resources to improve public safety.”
Visa and MasterCard charge Oakland a so-called interchange fee every time the City accepts credit or debit cards for payments of parking tickets, business license taxes and other fees. Higher charges resulting from price fixing by Visa and MasterCard cost Oakland taxpayers an estimated $103,000 a month – more than $1 million a year.
Oakland’s objection asks the Court to reject or modify the proposed settlement because it perpetuates anti-competitive business practices by credit card companies and fails to reform the payment systems’ problems, including excessive interchange fees that are passed onto consumer; it offers only minor payments in damages to the City and other class members; and it grants an improper and broad release, which immunizes Visa and MasterCard from legal challenges to future changes to interchange rules.