Less than a week after filing the lawsuit, Disney on Wednesday settled a lawsuit against Visa and Mastercard accusing credit card companies of charging inflated processing fees.
According to a court document, Disney decided to dismiss the lawsuit. Terms of the agreement were not disclosed.
The suit revolved around interchange fees, which credit card companies charge for each transaction to cover costs associated with processing and authorizing payments. Merchants have long argued that Visa and Mastercard’s market power allows them to price these fees, which ultimately leads to higher prices for customers.
“Visa and MasterCard and their members have obtained and maintained market power in the merchant credit card acceptance market and in the merchant debit card acceptance market in the United States”, writes Sanford Litvack, representing Disney, in the complaint. “Exercise of this market power has led merchants to pay excessive interchange and network fees, harming both applicant and consumers (including cardholders) through higher costs and decreased consumer well-being.
The two companies account for more than 80% of all debit purchases, according to the complaint.
Disney sued after pulling out of a $6 billion settlement, which included an agreement to lower transaction processing fees for eight months, in a nearly identical class action lawsuit filed by retailers against Visa, Mastercard and major banks. Other major retailers also opted out of the deal to secure better terms for themselves. In February, Amazon resolved a months-long standoff with Visa over interchange fees that threatened to ban customers from using Visa credit cards on the online retailer’s websites.
Disney and its attorneys declined to comment. Visa and Mastercard did not respond to requests for comment.