October 11, 2016A federal judge in California on Friday agreed with plaintiffs to let a lawsuit move forward alleging the card networks acted improperly by together setting the Oct. 1, 2015 date for the shift in liability for fraudulent purchases from issuing banks to merchants if they were not ready to accept EMV-compliant transactions in their stores. Several small retailers brought the suit against American Express, Discover, Mastercard, Visa and many of the major issuers when it became clear that many retailers would be unable to meet the deadline simply because of a wait to get new terminals certified. In his decision delivered recently, U.S. District Judge William Alsup said the case against the four card brands can move forward as a class action, while the issuing banks are exempted for the time being. The retailers sued under the Sherman Antitrust Act, pointing to the single liability-shift date and the differences between EMV implementation in other parts of the world. “When the networks had implemented liability shifts in other countries, they unfolded quite differently from what later occurred in the United States,” Judge Alsup wrote in his ruling. “Implementation was largely staggered in other countries, meaning no common effective date. Moreover, some of the networks offered certain accommodations in other countries by reducing interchange fees, implementing gradual rollouts and providing additional time to install terminals.” An ultimate win by merchants in the case could delay full implementation of EMV in the U.S. To date, the expected effects on card-not-present merchants of the switch to EMV have begun to manifest. Counterfeit card fraud at the POS has begun to fall while fraud in the e-commerce channel continues to rise.