Mastercard, Visa dealt setback in UK fees suit
ABritish appeals court ruled in favour of retailers including J Sainsbury in a blow to credit card firms that could now face billions of pounds in damages.
The fees fixed by Visa and MasterCard restrict competition and are unlawful, Judge Terence Etherton said today in London.
The ruling, which also involved Wal-Mart Stores Inc’s Asda and Wm Morrison Supermarkets, resolved wildly different decisions by judges in the lower courts. The case now goes back to a speciality competition judge to reconsider whether the restrictive practices were justified in the interests of economic efficiency.
“The ruling is a clear blow to MasterCard and Visa, though it left open the possibility to reduce their exposure to damages,” said Aitor Ortiz, an analyst at Bloomberg Intelligence.
At issue is the use of socalled interchange fees, levied by banks at rates set by the card companies each time a consumer’s plastic is swiped at a register.
The fees are then passed on to the retailers. MasterCard faces at least 10 lawsuits filed by retailers in the UK totalling as much as $2 billion (Dh7.34 billion) in claims, according to Bloomberg Intelligence.
Lawyers for the retailers at Stewarts Law said the ruling “unequivocally recognised that the fixing of interchange fees by MasterCard and its network members over many years was and is an unlawful infringement of competition law.”
In a statement, MasterCard emphasised that the appeals court ruling isn’t final and the issue will be reviewed by the Competition Appeal Tribunal.