On July 14, 2005, The Kroger Co., Ahold U.S.A., Inc.; Albertson's, Inc.; Eckerd Corporation; Maxi Drug, Inc.; Safeway, Inc.; and Walgreen Co. filed a federal lawsuit against Visa U.S.A. Inc. and Visa International Service Association alleging the credit card company has engaged in price fixing and restricting competition related to credit card transaction fees.

The lawsuit, which was filed in U.S. District Court for the Southern District of New York, alleges that Visa unlawfully set the interchange fees that are charged to merchants each time a customer makes a purchase with a Visa credit card. The suit also charges Visa with creating and imposing rules and restrictions on merchants that preclude merchants from being able to negotiate lower fees.

Interchange fees are the monies paid by retail merchants to the card association for processing and receiving payment for a transaction associated with a general-purpose payment card. The fees are set by Visa and its member banks and enforced by member banks through their contracts with merchants.

Rapidly rising interchange fees are a serious problem, costing retailers and consumers an estimated $20 billion or more each year. Interchange fees reportedly cost the average U.S. household more than $230 a year.

The complaint seeks injunctive relief to stop the anticompetitive practices plus unspecified damages.