Mastercard faces £10bn UK penaltyEuropost
UK court in London gave a go ahead to a class action against the global card operator Mastercard. The action is valued to over 10 billion pounds, Reuters reported. The claimants are said to be some 46 million British adults which are seen as eligible to receive some £300 if the court reaches a favourable verdict.
The Competition Appeal Tribunal (CAT) was expected to certify Britain's first mass consumer class action. It was brought up by former ombudsman Walter Merricks, after UK Supreme Court overruled objections to it in December 2020. The decision to reach final authorisation to settle the five-year case as a collective action will set a standard for a series of other potential class actions that have been stalled in its wake.
"Mastercard has thrown everything at trying to prevent this claim going forward, but its efforts have failed," Merricks said in a statement. "The tribunal's ruling heralds the start of an era of consumer-focused class actions which will help to hold big business to account in areas that really matter." Mastercard said the "spurious" claim was being driven by lawyers and backed by organisations "primarily focused on making money for themselves".
Merricks alleged Mastercard to has charged excessive "interchange" fees. Those are the fees retailers pay to credit card companies when consumers use a card to shop. The envisage period is between May 1992 and June 2008 and that those fees were passed on to consumers as retailers raised prices.
However Merricks failed to expand the scope of the case by adding the estates of the deceased and compound interest to the claim. Mastercard said this reduced the claim's size to some 10 billion pounds. Still the claimants argue that the ammount put is 15 billion pounds. "The decision today reduces the value of this spurious claim by more than 35%," Mastercard said in a statement. "Mastercard is confident that over the coming months a review of key facts will further significantly reduce the size and viability of the claim."