Visa and Mastercard Lose Debit and Credit Card Charges Legal Battle With Supermarkets

Visa and Mastercard have lost the most recent round of its ongoing legal battle with a conglomerate of supermarkets. It comes a court discovered that their card charges were considered to be too high and had breached the rules of competition.

The two credit card titans had been accused by a number of retailers because of charging overly high fees which are known as interchange fees. They charge it to the retailers when customers use a credit or debit card.

Today, the Court of Appeal ruled in favour of Argos, Sainsbury’s, Asda, and Morrisons. It discovered that the fees were too high and violated the competition law of the European Union. The court also opposed that they were necessary, as had been claimed by Visa and Mastercard.

The law firm that acted for Argos, Morrisons, and Asda is called Stewarts. Its co-head of competition litigation, Kate Pollock, stated: “Our clients and we are delighted that the Court of Appeal has unequivocally recognised that the fixing of interchange fees by MasterCard and its network members over many years was and is an unlawful infringement of competition law. Our clients now look forward to a swift and final resolution of this matter.”

The Court of Appeal, however, did not rule what level of interchange fee was considered to be lawful so it has sent some aspects of the said case back to the Competition and Appeals Tribunal (CAT). The Tribunal will determine what the considered “lawful” fee rate is. It will then determine the damages that Mastercard and Visa will be required to pay.

Sir Terence Etherton, the Master of the Rolls, suggested that a 0.19 percent for credit cards and 0.2 percent charge for debit cards would be lawful. It was accepted by Sainsbury’s during an earlier trial.

A Mastercard spokesperson stated: “We are currently reviewing the court’s judgment and considering our next steps. However, we continue to firmly believe that retailers derive real value from our network and we are committed to helping our retail partners grow their businesses and encourage the adoption of ever more convenient, safe and secure payments.”

Visa was requested to issue a comment regarding the matter.

This most recent judgment is not likely to mark the end of the long-running litigation, and the said case could even end up in the Supreme Court.