UK Retailers Win Legal Battle Against Mastercard and Visa

The UK’s highest court upheld a ruling that multilateral interchange fees unfairly restrict competition, opening the way for retailers to receive potentially billions of pounds in damages.

The UK Supreme Court on Wednesday dismissed an appeal by credit card companies Visa and Mastercard, upholding an early Court of Appeal ruling that multilateral interchange fees (MIFs), which are set by the card companies and charged to retailers each time a credit or debit card purchase is processed, breach both UK and EU competition law.

The case was originally brought by retailers Sainsbury’s, Asda, Argos and Morrisons in 1992, and Mastercard and Visa’s appeal was heard over four days in January this year. After three separate rulings on the issue in lower courts and tribunals produced different results, the Supreme Court chose to uphold the Court of Appeal’s finding in 2018 that the MIFs charged in the Visa and Mastercard payment card schemes were unlawful.

Kate Pollock, head of competition litigation at Stewarts, the firm representing Morrisons, Asda and Argos, commended the decision. “The fixing of interchange fees by Mastercard and its network members over many years was an unlawful infringement of competition law,” she said in a statement, adding that her clients “look forward to a swift resolution of the matter without further delay.

Visa said that it was “disappointed that the Supreme Court did not agree with the previous High Court ruling that Visa’s UK interchange complies with competition law.

Meanwhile, a Mastercard spokesperson said that the Supreme Court’s decision was “not a final ruling,” and that the issues would be raised in further court hearings, which “will most likely take place in 2021.

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