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MasterCard Wins Legal Battle Concerning Card Fees

MasterCard Wins Legal Battle Concerning Card Fees

Retailers including Morrisons, Asda, and New Look pursued a court battle against MasterCard concerning its cross-border charges on the use of debit and credit cards (interchange fees). MasterCard faced approximately ten separate claims from UK retailers, totalling over £1.2 billion in compensation. In 2015, the European Commission (EC) held that MasterCard had prevented banks from offering lower fees to retailers in different countries. This was because interchange fees varied between member states, leading to customers in the EU facing higher fees. Commissioner Margrethe Vestager stated, “We suspect MasterCard is artificially raising the cost of card payments, harming consumers and retailers in the EU”. For anti-trust breaches, EU rules stipulate that the EC can fine a company up to ten per cent of global revenues – last year, MasterCard’s were almost $10 billion.
At the High Court, the central issue in all the claims was whether the interchange fees MasterCard set for credit and debit card transactions by consumers were anticompetitive and, whether or not this infringed UK and EU law and, if so, by how much. Justice Popplewell ruled in favour of MasterCard, finding that the historic rates charged were necessary for it to function. He stated, “I must decide the case on the evidence before me, which is largely directed to a different period of time and a different market”.
Justice Popplewell said the trial was looking at a different period of time to that examined by the EC, which had looked at the period between 1992 and 2007, and there was only “only a small period of overlap”. As of 2015, MasterCard became part of an increasing list of big US companies facing investigation by the EC. This list also includes Apple, Amazon, and Starbucks.

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