On 14 July 2016 the Competition Appeal Tribunal (the “CAT”) found that MasterCard had infringed UK and EU competition law in the setting of UK multilateral interchange fees in respect of credit and debit card transactions (known as “MIFs”, these are fees paid by merchants’ banks to cardholders’ banks for processing card transactions).
The CAT concluded that for the period from 2006 to 2016, MasterCard had overcharged Sainsbury’s:
- 0.4% of the value of credit card transactions – the value of sales was £25,471,037,998 and therefore there was an overcharge of £102,787,542; and
- 0.09% of the value of debit card transactions – the value of sales was £875,570,836 and therefore there was an overcharge of £760,406.
Sainsbury’s were awarded £68,582,245 plus interest (although this amount is a significantly reduced figure as Sainsbury’s bank was found to have benefited from the infringement).
This is the first of many private damages claims against Visa and MasterCard in relation to MIFs. There are private damages claims valued at over £1 billion pending against Visa and MasterCard in the UK and there was previously a settlement between MasterCard and Tesco for a reported $61 million. In addition, a, £19 billion ‘opt-out’ consumer class action is being brought against MasterCard by Walter Merricks, former Chief Financial Services Ombudsman, as class representative. The class action was announced in July and will reportedly be filed in September.
Businesses will be well advised to consider their potential liability in relation to private actions for damages or indeed the potential for launching (or joining) a private damages claim or class action. If you would like to discuss the risks or obtain any further information or advice in this regard, then please feel free to contact our competition team.