San Diego pizza shop sues Visa, Mastercard over merchant fees

The Pizza Standard has only accepted Visa and Mastercard credit cards since 2021, so it didn't qualify for a $5 billion settlement inked in 2019.BROOKLYN (CN) — A San Diego pizzeria has sued Visa, Mastercard and several banks in Brooklyn federal court, claiming the restaurant had to pay artificially inflated credit card fees on credit card transactions that, all told, cost merchants hundreds of billions of dollars.The Pizza Standard LLC filed the class action Wednesday, naming, in addition to the credit card companies, Bank of America, Capital One, Chase Bank, Citibank and Wells Fargo.“This case challenges a massive, ongoing conspiracy between Visa, Mastercard, and the nation’s largest banks to artificially inflate the fees that merchants pay on every credit card transaction,” The Pizza Standard writes in the 84-count complaint, accusing the defendants of imposing a “deadweight toll on virtually every credit card purchase in America.”“That conduct has been litigated, but it has not stopped,” the plaintiff says. In 2019, Chief U.S. District Court Judge Margo K. Brodie approved a $5 billion settlement to merchants harmed by anticompetitive trade practices in the credit card industry. But the settlement, stemming from a suit dating back to 2005, accounted for harm suffered before Jan. 24, 2019.The Pizza Standard has only accepted Visa and Mastercard credit cards since 2021, so it didn’t qualify for the settlement, which the Second Circuit affirmed in March 2023.“In short: some merchants obtained relief for pre-2019 purchases, some may eventually benefit from prospective rule changes, but merchants accepting cards after January 2019 are left with zero recompense for their injuries suffered since then,” the pizza restaurant writes, adding the group includes millions of merchants.Merchants pay “interchange fees” from each credit card transaction at their business. Beyond that, however, Visa and Mastercard charge “network fees” and other fees the plaintiff says would be significantly lower if not for the “cartel” formed by Visa, Mastercard and banks that issue their credit cards.Reinforcing the conspiracy, The Pizza Standard says, is the fact the same banks issue cards for both companies and, together, comprise the “vast majority” of all cards issued.The pizzeria is asking the court to hold the defendants liable for antitrust violations and award damages to the plaintiff class.Representatives for Visa, Mastercard and the accused banks did not immediately return requests for comment.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads