Mastercard is celebrating a high court ruling in its favor in a lawsuit brought on by some of the UK’s top retailers regarding interchange fees.
The company is currently dealing with at least 10 separate lawsuits from UK retailers seeking about $1.2 billion in compensation over interchange fees. Mastercard is accused of setting interchange fees on consumer credit and debit card transactions that are anti-competitive and infringed UK and EU law.
But in a ruling today, Mr. Justice Popplewell ruled in favor of Mastercard and found that the rates charged were necessary in order for the company to operate.
According to a statement released by Mastercard, the judge had “carefully analyzed MasterCard’s interchange rates for the entire period of the claim and found that those rates were significantly below the lawful level of interchange that could have been charged to the retailers for those benefits.”
The ruling came as a surprise to the retailers, with their lawyers stating that the European Commission, the General Court and the Court of Justice of the European Union had all ruled that Mastercard’s interchange fees were anti-competitive.
Judge Popplewell said, however, that the trial was looking at a different time period than the dates investigated by the European Commission. That period was between 1992 and 2007, with the dates in the lawsuit showing “only a small period of overlap.”
“I must decide the case on the evidence before me, which is largely directed to a different period of time and a different market,” the judge said.
Mastercard said it was “grateful” for today’s ruling. “Mastercard views this decision as a confirmation of the legitimacy and importance of interchange in our payment system and a recognition that its value based interchange rates were lawful and compliant with competition law.”
Stewarts Law, the firm that represents the retailers in this lawsuit, called the judge’s decision “disappointing” and will most likely appeal. Some of the retailers involved in the suit include Asda, Morrison, New Look and Next.
Despite its legal woes, Mastercard said in the statement that it remains “committed to our retail partners and will continue to focus on helping grow their businesses and encouraging the adoption of ever more convenient, safe and secure payments.”
Full Content: Financial Times
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