The U.K.’s top judges ruled in favor of retailers including J Sainsbury Plc in a blow to credit-card companies that could now face billions of pounds in damages.   (AP Photo/Keith Srakocic, File)
The U.K.’s top judges ruled in favor of retailers including J Sainsbury Plc in a blow to credit-card companies that could now face billions of pounds in damages. (AP Photo/Keith Srakocic, File)

Mastercard, Visa face payouts to retailers after top court case

By Jonathan Browning Time of article published Jun 17, 2020

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JOHANNESBURG - The U.K.’s top judges ruled in favor of retailers including J Sainsbury Plc in a blow to credit-card companies that could now face billions of pounds in damages.

The Supreme Court dismissed an appeal by Visa Inc. and Mastercard Inc., ruling that fees the companies were charging shops restrict competition.

The long-running litigation now allows Sainsbury as well as other supermarkets including Wal-Mart Stores Inc.’s Asda and Wm Morrison Supermarkets Plc, to proceed to a trial on the size of the damages, the judges said in their unanimous ruling Wednesday. At issue is so-called interchange fees, levied by banks at rates set by the card companies each time a consumer’s plastic is swiped at a register.

Mastercard’s attempt to get a separate tribunal to reconsider some of the issues “offends against the strong principle of public policy and justice that there should be finality in litigation,” the judges said.

“The fixing of interchange fees by Mastercard and its network members over many years was an unlawful infringement of competition law,” Kate Pollock, a lawyer for some of the supermarket chains said in a statement.

Mastercard insisted that the decision was “not a final ruling.”

“There will be further court hearings to determine the key issues raised. These hearings will most likely take place in 2021,” a spokeswoman for MasterCard said in a statement. Visa said it was disappointed, adding that the fees are a critical “component to maintaining a secure digital payments ecosystem that benefits all parties.”

Mastercard faces a series of lawsuits filed by retailers in the U.K. that could see the total size of the claims soar.

“This case will now provide guidance for the hundreds of other business claimants behind the lead cases,” said Rob Murray, a lawyer at Mishcon de Reya, who represented Sainsbury.

BLOOMBERG 

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