|
Terms of the Settlement Lead-Counsel and Co-lead Counsel for the Plaintiffs engaged in separate negotiations with Visa and MasterCard, which resulted in the execution of two separate settlement agreements on June 4, 2003. The Visa Settlement Agreement and the MasterCard Settlement Agreement (collectively, the "Settlement Agreements") may be viewed on the Website. The Settlement Agreements specify the following relief for the members of the certified class: A. The creation of two settlement funds, totaling $3.05 billion, from which Class member claims for damages can be satisfied (after the payment of Class Counsel's fees, costs and expenses, including the costs of notice and administration of the settlement funds, to be awarded by the Court). MasterCard will deposit $1.025 billion over a ten-year period in the MasterCard Settlement Fund and Visa will deposit $2.025 billion in the Visa Settlement Fund over the same ten-year period. B. The unbundling of Visa and MasterCard debit card services to merchants from Visa and MasterCard credit card services to merchants, effective January 1, 2004. Because of this unbundling, merchants will have the right to decide whether or not to accept the Visa and/or MasterCard debit products in a competitive environment, and not be required to accept the Visa and MasterCard signature debit transactions as a condition of accepting the Visa and MasterCard credit cards. Plaintiffs believe that, because of this competition, and merchants' right to decline Visa and MasterCard signature debit acceptance, Visa and MasterCard will maintain their lower interim rates or may even lower their rates further after January 1, 2004 to merchants for acceptance of their debit products, and that this could result in savings to Class members that have not been determined but which could be worth tens of billions of dollars or more. Visa and MasterCard financial institutions -- i.e., the banks that receive the interchange fees at issue for the Visa and MasterCard debit transactions performed by their cardholders -- have already begun to report an anticipated reduction in earnings/revenues that will result from the Settlements. C. The creation and placement of clear, conspicuous and uniform visual designations on Visa and MasterCard debit cards (or debit devices). In this way, merchants will be able to visually identify Visa and MasterCard debit cards/devices at the point of sale. Visa and MasterCard are also required to identify their debit cards/devices so merchants can identify them with electronic equipment. D. Merchants shall also have the right to encourage or steer customers from Visa and MasterCard debit transactions to other forms of payment. E. The barring of Visa for two years from entering into agreements with financial institutions that prohibit financial institutions from issuing debit cards from competing PIN debit networks. F. The establishment of unique interim interchange rates for Visa and MasterCard debit transactions for the period from August 1, 2003 through December 31, 2003. These rates will be significantly lower than the rates currently being charged for Visa and MasterCard debit transactions (for MasterCard at least 1/3 lower aggregate effective rate, for Visa at least 48 basis points lower for nonsupermarkets and at least 14 cents lower per transaction for supermarkets). Plaintiffs believe that this could result in savings to Class members that have not been determined but which could be worth more than $1 billion. G. The Court's continuing jurisdiction over Visa, MasterCard and this case to ensure compliance with the Settlement Agreements. |
