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Mastercard, the Next Installment. The Retailer Strikes Back

The previous four episodes of the Mastercard saga (as detailed in our previous blog posts) focussed on a number of legal battles between Mastercard and both consumers and retailers.

These disputes have centred on Mastercard’s alleged “uncompetitive” interchange fees and restrictive rules on cross-border acquiring. The latest claim by retailers follows a class action brought on behalf of consumers under the Consumer Rights Act 2015 in relation to the same charges.

Retailers including Nando’s, the Cooperative Group and Harvey Nichols have launched a new claim worth approximately £300 million (plus interest and costs), on the basis that Mastercard allegedly breached EU and UK regulations through the setting of “unlawful and anti-competitive” fees. This follows Humphries Kerstetter’s announcement in June 2017 that it would be bringing the claim on behalf of 27 high street retailers.

In addition to arguing that Mastercard’s service charges are anti-competitive, the claimants allege that Mastercard has abused its dominant position in the market. The claimants say that Mastercard credit cards are such a popular payment mechanism that retailers view them as “must-take”. The claimants are also seeking a declaration that the interchange fees are (and always were) void and unenforceable.

In 2007, the EU found that Visa and Mastercard’s high interchange fees breached Article 101 of the Treaty on  the Functioning of the European Union, thus inviting the consumer class action referred to above (led by Walter Merricks and discussed in a previous blog post) followed by several similar claims by retailers.

Until recently, it would have been forgivable to think that the retailer’s current claim (and the consumer class action claim) would be bound not to succeed. This is because in Sainsbury’s’ unsuccessful claim against Visa in respect of their high interchange fees, Mr Justice Phillips ruled that the credit card giant’s fees were not inherently anti-competitive (however, Sainsburys is still expected to appeal this decision).

In light of the legal developments since 2007, the outcome of the retailer’s claim and the consumer class action are far from predictable. We therefore look forward to the next instalment in the long running Mastercard saga.

© Copyright 2018 Squire Patton Boggs (US) LLP

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About this Author

Garon Anthony, Squire Patton Boggs, litigation attorney
Partner

Garon Anthony is a partner in the Litigation Practice Group. He has specialised in dispute resolution work since he qualified as a solicitor and has considerable experience in general corporate and commercial litigation work, acting for both private and public sector clients.

Garon regularly resolves disputes for clients in the financial services/insurance sector. That encompasses professional negligence, fraud issues/recovery processes, dealing with claims and complaints by customers of the mis-selling of retail products, handling insurance policy coverage disputes for corporate...

44 121 222 3507
Helen Cain, Squire Patton Boggs Law Firm, Litigation Attorney, Birmingham, United Kindgom
Associate

Helen joined the Litigation team in 2014, having completed her training with the firm. Helen has a broad range of experience in general commercial litigation, pensions disputes and financial services litigation.

She has experience in advising on a wide range of matters of both a contractual and tortious nature, including breach of contract, misrepresentation, debt recovery and professional negligence.

Helen regularly acts for a diverse client base including PLCs, SMEs and individuals. Helen also has experience of acting for pension trustees and representative beneficiaries in professional negligence claims and rectification proceedings.

Helen completed a secondment at Clearwater Corporate Finance, working with the deal origination team. Helen has also spent time in the firm’s Intellectual Property & Technology Practice Group, Real Estate Practice Group and Litigation (Real Estate and Property Litigation) Practice Group.

Helen is a member of the Association of Pension Lawyers.

Experience

  • Advising a leading retail bank in relation to a variety of consumer disputes including a large number of claims for mis-selling of payment protection insurance and investment products.
  • Acting for a leading retail bank in respect of a large number of Part 8 costs only claims.
  • Facilitating enforcement action against individuals.
  • Acting for a large specialty jeweler in respect of specific performance and breach of contract claims.
  • Assisting in advising an individual in respect of a complex part 20 claim regarding the unlawful diversion of funds.
  • Acting for a Residents Action Group in respect of a private nuisance claim.

Education

  • BPP Law School, L.P.C., 2012
  • College of Law, Postgraduate Diploma in Law, 2011
  • University of Birmingham, B.A., 2010

Admissions

  • England and Wales, 2014

 

+44 121 222 3309