UK: Sainsbury wins millions in Mastercard fee dispute

UK: Sainsbury wins millions in Mastercard fee dispute

hammer1A judge in London has awarded 69 million pounds (approximately NZ$127 million) to supermarket chain J Sainsbury Plc, following a long-running dispute over fees charged on card transactions with Mastercard Inc.

Mastercard charges on credit and debit card transactions in the UK restricted competition, according to a Competition and Appeal Tribunal judgment. The judgment is the first in a series of claims brought by retailers in the UK and Europe, alleging that Mastercard and Visa charged anti-competitive and excessive fees on debit and credit card transactions. The retailers are seeking combined damages of more than 1.2 billion pounds (approximately NZ$2.2 billion).

According to a report in Bloomberg, “This marks the first substantial award in a competition damages claim in the UK, and we believe in Europe,” commented Sarah Houghton, a lawyer at Mishcon de Reya advising the supermarket chain. “It has an importance well beyond the precedent it sets for claims against the Mastercard and Visa schemes.”

The ruling follows news that British consumers are preparing a 19 billion-pound class action lawsuit against Mastercard. The claim would be the UK’s biggest and one of the first filed under the Consumer Rights Act 2015.

Though the ruling resulted in compensation for Sainsbury, the tribunal may have boosted Mastercard’s defense against that class action, after it concluded the retailer didn’t pass the costs to consumers in the form of higher prices, Mastercard said in a statement. The credit-card provider will take a pretax charge of about $90 million in its second quarter to cover the judgment, it said.

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