Paul, Weiss Achieves Landmark Settlement for Mastercard in Long-Running Antitrust Class Action Over Payment Card Fees

As reported by The New York Times, The Wall Street Journal and many other news media, Mastercard announced a landmark settlement with a nationwide class of merchants that resolves a major antitrust class action challenging the transaction fees associated with Mastercard and Visa payment cards after nearly two decades of hard-fought litigation.

The class action is part of a broader, complex multidistrict litigation involving millions of U.S. merchants and multiple actions. Plaintiffs in this litigation have challenged the “interchange” fees associated with payment card transactions, as well as certain network rules governing merchants’ acceptance of payment cards. They have sought treble damages related to all Mastercard and Visa payment-card transactions at U.S. merchants since 2004, in addition to sweeping injunctive relief targeted at the core business practices underlying the networks’ businesses. Paul, Weiss has been Mastercard’s lead counsel in this litigation since it began in the early 2000s.

This most recent settlement, reached with a class of merchants seeking injunctive relief, allows merchants to continue to benefit from accepting payment cards, while preserving the core practices that are integral to Mastercard’s business model. The settlement includes a commitment to reduce and cap, for at least a five-year period, the U.S. credit interchange fees paid to card-issuing banks. The settlement also features adjustments to Mastercard’s network rules, which will give merchants greater flexibility at the point-of-sale, including the opportunity to steer customers to preferred payment methods and to have more options around surcharging.

Mastercard, along with Visa and several payment-card issuing banks, previously reached a $5.6 billion settlement with a class of merchants seeking damages, which was approved in 2019 and upheld on appeal in 2023. Paul, Weiss presented oral argument on behalf of the entire co-defendant group in the appeal. Upon final approval of this week’s settlement with the injunctive relief class, Mastercard will have resolved the vast majority of all pending U.S. merchant litigation directed at interchange fees and network rules. Paul, Weiss continues to represent Mastercard in several actions brought by individual plaintiffs who opted out of the damages class settlement, as well as other related actions.

The Paul, Weiss team representing Mastercard in these matters is led by litigation partner Ken Gallo and currently includes litigation partners Andrew Finch, William Michael, Tee St. Matthew-Daniel, Brette Tannenbaum and Nina Kovalenko, and counsel Gary Carney and Donna Ioffredo. The settlement would not have been possible without the contributions of many other team members over the years.