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Visa Inc. Message Board

  • cmdr_boom_boom cmdr_boom_boom Sep 11, 2013 2:38 PM Flag

    Showdown over swipe fee price-fixing settlement

    Article
    "Showdown over swipe fee price-fixing settlement [Star Tribune (Minneapolis)]"

    "Sept. 11--It took seven years to reach a proposed $7.25 billion antitrust settlement between retailers and Visa Inc., MasterCard Inc. and the banks that issue their plastic cards.
    It took another year to feud over the agreement.
    On Thursday, supporters and opponents will sound off in a New York courtroom as part of what's likely to be the final showdown over claims that the credit card companies broke antitrust laws by fixing billions of dollars in swipe fees that merchants pay each year.
    Major retailers have objected to the settlement as perpetuating a broken payments system, with many backing out of it altogether. Some, including Target Corp., are taking new legal action.
    U.S. District Judge John Gleeson, in charge of approving the historic settlement, will probably make a decision in 30 to 120 days."

    So it will be another 1 to 3 months before it's over

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    • This is really a win/win for Visa. It's hard to lose at this point (it IS possible of course just unlikely). I'll explain:

      Scenario A: settlement is approved, cash is disbursed. End of long time litigation plus releases granted will stop the litigation from cropping up right after again. Some monies will be returned to V to account for the people who opted out and of course taxed.

      Scenario B: settlement is not approved, case goes to trial. V will get to record that 4B back as a one time gain thereby boosting EPS for the final quarter of FY 2013 (this is insanely important that it's the last quarter of the fiscal year because the year end numbers will reflect this). Taxes will always be a thorn but the result is that the EPS for the year will be through the roof. As the expert pointed out, it is foolish to take the case to trial because in all likelihood the plaintiffs will walk away with little to nothing given the material that was presented to him.

      Scenario C: case goes to trial and the defendants lose a brutal fight- ouch. It's slim chances, but I'll put it out there since it is a possibility.

      Sentiment: Strong Buy

 
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