Credit card firms could face significant damages claims after the Supreme Court dismissed an appeal by Visa and Mastercard, ruling that fees the companies were charging retailers restrict competition.
The long-running litigation, which was ruled upon in the hearing yesterday (June 17), now allows retailers to proceed to a trial on the size of the damages.
The challenge contested by the two credit card giants was to interchange fees (merchant charge), levied by banks at rates set by the card companies each time a consumer’s plastic is swiped at a register.
The ruling by the UK’s top judges could now leave credit-card companies facing billions of pounds in damages, according to MHA MacIntyre Hudson.
The fixing of interchange fees by credit cards and their networks has been described previously as “an unlawful infringement of competition law” it said.
Following yesterday’s hearing, Mastercard insisted that the decision was “not a final ruling”, as there will be further court hearings – likely take place in 2021 – to determine the key issues raised.
However, in announcing the judgement, Justice Nicholas Hamblen dismissed all grounds of appeal brought by the credit card companies, except one point over the degree of precision required to calculate loss, the so-called broad axe issue.
"The effect of the collective agreement to set the MIF is to fix a minimum price floor for the ," Justice Hamblen said.
"A significant portion of the is thereby immunized from competitive bargaining and is determined by collective agreement rather than by competition."
In a statement issued following yesterday’s judgement MHA said that this week’s judgement did not specify exactly how much retailers are entitled to in repayment.
However, it said that the ruling was “expected to pave the way for other cases to be brought to the commercial court.”