The U.K. Supreme Court has rejected Mastercard’s attempt to force individual lawsuits over claims the card brand overcharged consumers and harmed competition for more than a decade.
The 3-2 ruling grants class action status on a £14 billion (about $18.5 billion) interchange lawsuit that could include more than 46 million consumers. The suit covers a 16-year period from May 1992 to December 2007, the date of the European Commission’s finding that Mastercard intra-European merchant interchange fee restricted competition. The lawsuit does not include business or corporate cards.
Walter Hugh Merricks, who served as an ombudsman for U.K. financial services, originally filed the lawsuit in September 2016. The U.K.'s Competition Appeal Tribunal refused class action status and did not certify a collective proceedings order that would have allowed the claimants to demand compensation. The Court of Appeal later ruled in favor of Merricks, finding the tribunal had made five errors of law. Mastercard appealed to the U.K.'s top court, and lost that appeal this week.
The Supreme Court reiterated the European Commission’s findings of 2007 that consumers are likely to bear some part of Mastercard’s interchange regardless of the form of payment, including other cards or cash. That means consumers do not have to be Mastercard cardholders to be part of the class action.
In an earlier case, Mastercard unsuccessfully challenged the European Commission's 2007 findings on interchange, then switched legal strategy to withhold class action status, potentially reducing the scale of legal action since claimants would have to file separate lawsuits. After this week's ruling, consumers may still opt out of the class action suit and sue Mastercard separately.
The U.K. Supreme Court issued a
