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A San Diego pizzeria has filed a proposed class action accusing Visa, Mastercard and five major banks of suppressing competition in fees merchants pay to accept credit cards. The complaint seeks to represent merchants that accepted the networks’ cards from Jan. 25, 2019, onward; the allegations are unproven, and the lawsuit’s status and any response from the defendants are not provided in the source report.
A San Diego pizzeria has filed a proposed class action accusing Visa, Mastercard and five major banks of using agreements and network rules to keep fees merchants pay on credit-card transactions artificially high. The 134-page complaint seeks to cover U.S. merchants that accepted the networks’ cards from Jan. 25, 2019, onward, but its claims have not been proven in court.
The defendants named in the complaint are Visa, Mastercard, Bank of America, Capital One, Chase Bank, Citibank and Wells Fargo. The pizzeria alleges that Visa and Mastercard coordinated with the banks, which issue cards, to maintain uniform schedules of interchange fees. These are charges merchants pay to issuing banks when customers use their cards. The filing describes the fees as effectively non-negotiable and says merchants have limited ability to avoid them.
The lawsuit also challenges rules it says require merchants that accept one Visa or Mastercard credit card to accept all cards on that network, even when some carry higher fees. It alleges that merchants are restricted from steering customers toward less costly payment methods, including through surcharges tied to particular cards. According to the complaint, those practices weaken incentives for banks and networks to compete on price. These are allegations, not findings by a court.
The complaint further alleges that Visa and Mastercard impose network fees of their own, including per-transaction and fixed charges, and that the rules allow those costs to rise without effective competitive pressure. It says merchants now pay more than $100 billion annually in fees to accept Visa and Mastercard credit cards. That figure is the complaint’s estimate; the source report does not provide an independent calculation or a comparison period.
The Costs Merchants Say They Cannot Avoid
If the allegations are upheld, the case could affect how card networks and issuing banks set fees and what choices merchants can offer customers at checkout. Card acceptance costs are paid by businesses, which may absorb them or account for them in prices. The complaint argues that rules covering a large share of card transactions prevent merchants from shifting business toward lower-cost options.
The proposed class could include businesses and other entities across the United States, not just the named pizzeria. But certification is not established by the filing: a court would need to decide whether the case can proceed on behalf of the proposed group. Any recovery, rule changes or other outcome would depend on the litigation and cannot be assumed at this stage.
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Earlier Settlement Covered Older Transactions
The new suit follows earlier multidistrict litigation over merchant fees. According to the complaint, a court approved a settlement in December 2019 that provided more than $5 billion in monetary relief for merchants. That settlement’s class period ended on Jan. 24, 2019, so the new plaintiff says it does not compensate merchants for transactions after that date.
The complaint also points to a separate settlement seeking changes to the networks’ rules. It says that settlement had received preliminary approval and that any benefits would apply prospectively, rather than pay merchants for fees they had already incurred after Jan. 24, 2019. The source report does not describe the later settlement’s final status or detail its terms. The new action focuses on alleged conduct affecting transactions beginning the next day, Jan. 25, 2019.
“a deadweight toll on virtually every credit card purchase in America”
— The complaint
Court Status and Defenses Remain Unknown
The source report does not state when the complaint was filed, identify a case number or court, or say whether the defendants have responded. It also does not establish whether the court will certify the proposed class or accept the plaintiff’s interpretation of the earlier settlements. Visa, Mastercard and the named banks’ positions are not included in the supplied material.
The claims that the defendants coordinated fee schedules, blocked competition and caused merchant losses remain allegations. The complaint’s estimate of annual fees and its characterization of the market have not been independently confirmed in the report. No ruling on liability or damages is reported.
Responses and Early Court Decisions
The next developments would include any responses from the defendants and initial court decisions on how the case proceeds. If litigation continues, the court may address procedural questions, including whether the proposed merchant class can be certified, before any decision on the merits. The source material gives no hearing date, response deadline or schedule for those steps.
Merchants and other readers should distinguish the new complaint from the earlier settlements: the filing requests relief for a later period, but the source does not report that a court has granted that relief. Any changes to card-network rules or compensation would depend on later court action or an agreement by the parties.
Key Questions
Who is being sued?
The proposed class action names Visa, Mastercard, Bank of America, Capital One, Chase Bank, Citibank and Wells Fargo as defendants.
What does the lawsuit allege?
The pizzeria alleges that the networks and banks used fee schedules and rules that limited merchant choice and competition, keeping credit-card acceptance costs high. Those claims have not been proven.
Which merchants could be included?
The proposed class covers individuals, businesses and other entities in the United States that accepted Visa-branded or Mastercard-branded credit cards from Jan. 25, 2019, until the alleged anticompetitive effects cease. A court has not been reported to have certified the class.
How is this case different from the earlier settlement?
The complaint says the earlier monetary settlement covered transactions only through Jan. 24, 2019. The new lawsuit seeks relief for the period beginning Jan. 25, 2019; the source report does not establish what relief, if any, the court will grant.
Source: hn
