Target Corp. is opposing a proposed $7.25 billion antitrust settlement over credit-card fees with Visa and MasterCard, arguing that the deal "is bad for both retailers and consumers."

The Minneapolis-based retailer is believed to be the largest company to publicly oppose the settlement, adding heft to merchant blowback since the deal was announced July 13. The proposed accord calls for Visa, MasterCard and 13 big banks to pay $7.25 billion to settle accusations that they have been colluding, fixing ever-higher credit-card swipe fees that have been gouging merchants.

Target suggested in a statement it issued Friday that the deal doesn't do enough to fix the system. "Target has no interest in surcharging guests who use credit and debit cards in order to allow Visa and MasterCard to continue charging unfair fees," the company said.

The retail giant said it is exploring its options "while working toward a solution that represents true reform."

The company said Monday that it isn't ready to discuss its plans. A company spokeswoman said it issued the statement in response to queries from reporters, and that it is still evaluating the proposal.

"As you probably know, interchange fees are one of Target's largest expenses, and the proposed settlement could have a significant impact on Target's business," Target spokeswoman Jenna Reck said via e-mail.

If it's approved in court, the settlement would end a seven-year legal battle and could be the largest antitrust class-action settlement in U.S. history.

Target is not one of the 19 retailers named as class plaintiffs in the main lawsuit representing about 7 million retailers around the country. But as one of the country's largest retailers, the company's opinion will likely carry weight in court if it files paperwork opposing the settlement.

Both the National Association of Convenience Stores and the National Retail Federation swiftly denounced the swipe-fee settlement when it was first announced July 13 for not going far enough to reform the credit-card-processing system.

At 100-plus pages, the settlement, filed in federal court in Brooklyn, is tough going.

Complex deal proposed

"Most folks are just beginning to grapple with its complexity," said Mallory Duncan, general counsel for National Retail Federation.

In addition to paying for past actions, the settlement calls for reforms of Visa and MasterCard rules and requires the card companies to negotiate with merchant-organized buying groups. Visa and MasterCard get a release from similar litigation in the future.

The settlement does not explicitly reduce long-term the fees merchants pay to process credit card transactions -- generally 1 to 3 percent of a customer's purchase.

The card companies and some state laws have long prohibited merchants from trying to pass on fees to customers via surcharges. The settlement gives them the right to impose a surcharge, subject to a cap, but the language is complex.

The National Retail Federation said the settlement creates so many hurdles to a surcharge that as a practical matter most retailers won't do it.

Duncan said his group has heard from many members and reaction has been "predominantly negative." He called Target's statement "a pretty strong indication that this proposed agreement is not ready for prime time."

"It does virtually nothing to rein in out-of-control swipe fees," he said.

Surprised by opposition

K. Craig Wildfang, the Minneapolis lawyer representing the class plaintiffs in the settlement, said Target's opposition surprised him, and that he hopes Target doesn't oppose in court the preliminary approval of the deal.

"Most of the blowback thus far has not been from actual merchants. It's from Washington-based retail trade executives," Wildfang said.

Wildfang said none of the parties opposing the settlement has offered a better alternative. The litigation has dragged out for seven years already, he said. "What is Plan B?" he asked. "A lot of the critics are jumping the gun and don't really understand the settlement."

"Hopefully, they'll take a step back," he said. "I think the vast, vast majority of merchants in the class are going to decide there are benefits to them."

At the same time the main settlement was reached, about 19 lawsuits filed against Visa and MasterCard by individual retailers, including Eden Prairie-based Supervalu Inc., alleging collusion on other matters were resolved.

Jennifer Bjorhus • 612-673-4683