The UK’s Supreme Court has ruled in favour of a group of retailers including J Sainsbury in the long running battle around historic interchange fees the networks charged leading to damages trials that lead to billions of pounds in damages.
The Court dismissed an appeal by Visa and Mastercard and said that a lower court was right to rule that certain fees they were charging shops restricted competition and broke the law.
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 [merchant service charge],” Justice Hamblen said. “A significant portion of the [charge] is thereby immunised from competitive bargaining and is determined by collective agreement rather than by competition.”
The long-running litigation now allows the supermarkets to proceed to a trial on the size of the damages, the judges said in their unanimous ruling Wednesday. At issue is the use of interchange fees, levied by banks at rates set by the card companies each time a consumer’s card is used at a POS.
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 the supermarket chains said in a statement.
Mastercard has insisted that the decision is “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 issued to Bloomberg.
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