Antitrust Law Daily Wrap Up, PRIVACY NEWS: Target agrees to settle with MasterCard over data breach for $19M, (Apr 17, 2015)

By Linda O’Brien, J.D., LL.M.

Target Corporation has entered into a settlement agreement to reimburse payment card network MasterCard International for costs incurred as a result of a December 2013 breach of the retailer’s database, Target announced on April 15. A class action was filed in the federal district court in St. Paul, Minnesota by consumers whose financial and/or personal information was compromised as a result of the breach, which impacted up to 40 million credit and debit cards (In re Target Corporation Customer Data Security Breach Litigation, Case No. 0:14-md-02522).

Under the settlement agreement, alternative recovery offers will be made by MasterCard to eligible parties worldwide that issued MasterCard-branded payment cards claimed to have been affected by the data breach. MasterCard will recommend that such eligible issuers accept the offers.

Target has agreed to fund up to $19 million in alternative recovery payments, depending on the extent of eligible issuer acceptances. The settlement is conditioned on issuers of at least 90 percent of the eligible MasterCard accounts accepting their alternative recovery offers, either directly or through their sponsoring issuers, by May 20, 2015.

“We are hopeful that Target’s agreement to pay up to $19 million to settle the claims of MasterCard and its issuers will result in a high level of issuer acceptance,” said Scott Kennedy, Target’s President of Financial & Retail Services. “Target intends to continue to defend itself vigorously against any assessments made by MasterCard on behalf of MasterCard issuers that do not accept their offers.”

Companies: Target Corporation; MasterCard International Incorporated

News: Privacy MinnesotaNews