Mastercard Could Pay Billions After Class Action Court Ruling
Mastercard could end up paying $18.6 billion for a U.K. class action lawsuit after losing another battle at the country’s highest court over illegal swipe fees. The UK Supreme Court allowed the class action to proceed against Mastercard for allegedly overcharging more than 46 million people in Britain over a 15-year period.
This decision could also have other implications, setting the stage for a string of class-action cases, after the judges made it easier to bring mass claims. The case will now be sent back to the Competition Appeal Tribunal (CAT) which oversees the U.S.-style class actions for breaches of UK or European Union competition law. Mastercard has faced several legal challenges since European Union courts said its payment fees unfairly restricted competition.
The case focuses on so-called interchange fees that are paid by merchants to accept credit and debit cards. Mastercard says it uses these fees to cover the costs of card services, security and innovation. The lawsuit alleges these fees were excessive between 1992 and 2008, that they had to be paid by businesses that accepted Mastercard payments from British consumers and were passed on through increased shop prices.
Mastercard said it “disagrees fundamentally with the basis of the claim,” BBC reports. “No UK consumers have asked for this claim. It is being driven by ‘hit and hope’ US lawyers, backed by organizations primarily focused on making money for themselves,” the company said.
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