UK: Landmark $17 billion Mastercard class action enters court

The first key hearing in a landmark UK class action against MasterCard gets underway on Wednesday, with the Competition Appeals Tribunal set to determine whether the case will be certified and can proceed to a full trial.

The record-breaking $17.3 billion claim was brought against MasterCard in September on behalf of 46 million British debit and credit card holders over the company’s charging of illegal payment fees. It is the first major US-style class action in the English courts following the UK’s introduction in 2015 of new legislation allowing “opt out” collective damages claims

MasterCard, which is being advised by magic circle firm Freshfields Bruckhaus Deringer, has over the past decade been embroiled in a series of legal battles over the level of so-called “interchange” fees it charged businesses on transactions between 1992 and 2007. These fees were found by European authorities to be unlawfully high. The plaintiffs, represented by Quinn Emanuel Urquhart & Sullivan, argue that part of the cost of these fees were passed on to consumers in the form of increased prices for goods and services.

MasterCard’s cross-border interchange fees have already been found to be illegal—the company’s long-running challenge to the European Commission’s decision was finally put to bed by the Europe’s highest court in 2014. Quinn Emanuel will now need to prove that the EC’s decision also applies to domestic interchange—essentially, fees incurred when using credit cards in the UK, rather than abroad—and that consumers suffered damages as a result of those fees.

Full Content: Law

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