On August 9, JP Morgan Chase & Co. agreed to cover almost 20 percent of a $6.05 billion deal to settle a price-fixing case brought over credit-card swipe fees. JP Morgan is the second-largest U.S. credit card issuer according to the Nilson Report. In 2005, the plaintiffs, merchants and retail industry associations, filed fourteen actions, namely alleging that JP Morgan & Chase Co. conspired with MasterCard and Visa to rig credit-card processing fees. In order the settle the lawsuit, Visa and MasterCard, along with a handful of U.S. banks agreed to pay $6.6 billion and reduce credit-card swipe fees temporarily. The deal includes cash payments of $6.05 billion for the class action participants and $525 million to individual plaintiffs.
It’ll be interesting to see how many of the plaintiffs agree to participate in class action lawsuit and how the settlement affects JP Morgan’s stocks, as the shares were down 0.4% in recent trading.