Visa and MasterCard have reached a settlement with plaintiffs in what is reportedly the largest antitrust case to date.
The suit dates back to 2005 when merchants began filing price-fixing lawsuits against the credit card giants and the banks who issue the cards. It grew into a class-action claim that Visa and MasterCard were working together on how much to charge merchants for each credit card transaction.
The final settlement represents a significant change in credit card swipe regulations and a sizable chunk of cash flowing from Visa and MasterCard to individual merchants.
The settlement requires the credit card companies and major banks involved in the suit to pay about $6 billion to the merchants involved in the suit.
That money represents past damages from the anticompetitive practices Visa and MasterCard allegedly engaged in, according to Huffington Post.
In addition to that sum, the companies have also agreed to a temporary reduction in fees for credit card transactions. That amount is valued at $1.2 billion. The decreased fees will last for eight months at which point Visa and MasterCard will have the option to make adjustment to the fee arrangement.
The settlement could also change how merchants deal with credit card transactions.
Previously, Visa and MasterCard prohibited sellers from charging more for credit card transactions. Under the new terms, merchants will be free to pass the cost of swipe fees to their customers although they will not be able to charge more than the fee, reports Huffington Post.
This battle may be over that doesn't mean the war is done. The settlement still requires judicial approval and attorneys' fees have not been determined, according to MSNBC.
If the settlement is approved Visa and MasterCard's payout may represent the largest ever in a private antitrust case brought under the Sherman Act.