The proposed settlement of a merchants' lawsuit over credit card fees that may cost Visa Inc. MasterCard Inc. and banks as much as $7.25 billion is likely to receive preliminary approval, Bloomberg reported.
In an order Thursday, a federal judge in New York said a proposed settlement agreement "appears to satisfy the requirements for preliminary approval."
The order, containing Judge John Gleeson's first public comments on the deal since it was unveiled in July, came in response to objections lodged by an expanding group of retailers and trade groups who contend it's unfair.
The deal, intended to cover about 7 million retailers, would put an end to about seven years of litigation that has dogged Visa and MasterCard. The suing merchants allege that banks conspired with the card companies to fix the so-called interchange fees that retailers are charged when customers pay with credit cards.
Gleeson said he will hear arguments against preliminary approval of the settlement on Nov. 9. He declined a request to form a committee for objecting retailers and said there would be an opportunity for a more thorough discussion at a later hearing on final approval.
Some retailers and their trade associations oppose the deal, saying it's too generous to the card companies and grants too much leeway to raise rates in the future.
Jeffrey Shinder, a lawyer representing some of those groups, told the judge in an Oct. 23 letter that many merchants don't think the deal qualifies for initial approval "because of its obvious and facial defects."