US-based multinational payment card services corporation Mastercard has now gotten an agreement in principle to settle a UK lawsuit over card fees.
The scene for the mass consumer claim was set in April 2019, with Mastercard facing, at that time, a GBP 14 billion lawsuit for imposing high card transaction charges. The lawsuit was approved by the British Supreme Court in December 2020, with the legal action being taken by Walter Merricks, former financial regulator, who claimed that 46 million UK customers paid scaled prices in shops over 16 years due to allegedly excessive transaction fees charged by Mastercard.
Additionally, the case was among the first mass consumer actions to be approved in the UK in 2021 after a nearly five-year back and forth from the Competition Appeal Tribunal (CAT) to the UK Supreme Court and back. In March of the same year, Mastercard was struggling to add nearly 14 million deceased individuals to the class action to minimise the scope of the case. The company was also resisting attempts to include compound interest in any award, which could have scaled the value of the claim by over GBP 2 billion.
Now, Mastercard announced that, during the latest round of the case at the CAT, it was mentioned that the company and Walter Merricks reached an agreement to settle the case. However, the decision is still subject to the tribunal’s approval. Back in October 2024, when the most recent judgment took place, the CAT underlined that the value of the entire claim was set by the claimant’s lawyers at GBP 10 billion. Despite this, according to Reuters citing a person familiar with the agreement, the figure of the settlement can be nearly GBP 200 million.
In an official statement, Merricks mentioned that, after approximately nine years of litigation with Mastercard, the agreed settlement is set to provide considerable compensation to class members who decide to come forward to participate in the distribution of the damages.
EU’s investigation into Visa and Mastercard’s fees
Back in November 2024, Visa and Mastercard were under scrutiny in Europe as antitrust regulators started investigating if their fees impact retailers’ operations. The European Commission questioned retailers and payment service providers on whether the number of fees in the EEA imposed by the two companies, as well as additional charges and deletion of existing ones negatively affected retailers’ businesses between 2016 and 2023. If pursued and successful, the antitrust cases could lead to significant fines, reaching as much as 10% of an organisation’s global proceeds.
Source: The PAYPERS
