Sainsbury was awarded $91 million by a London judge following a long-running dispute over fees charged on card transactions with Mastercard Inc.
Mastercard charges on UK credit and debit card transactions restricted competition, according to a Competition and Appeal Tribunal judgment published Thursday.
The judgment is the first in a series of claims brought by retailers in the UK and Europe, alleging that Mastercard and Visa charged anti-competitive and excessive fees on debit and credit card transactions. The retailers are seeking combined damages of more than 1.2 billion pounds.
“This marks the first substantial award in a competition damages claim in the UK, and we believe in Europe,” Sarah Houghton, a lawyer at Mishcon de Reya advising the supermarket chain, said in an e-mail. “It has an importance well beyond the precedent it sets for claims against the Mastercard and Visa schemes.”
The 69-million pound victory is equivalent to more than a day’s sales for Sainsbury, which brought in 23.5 billion pounds last year.
MasterCard offered commented on the UK Competition Appeal Tribunal ruling in the Sainsbury’s Supermarkets case via public statement.
“On first look, we are grateful that the court found that significant benefits flow to both retailers and cardholders from interchange in the UK. What’s interesting is that the court concluded that a lawful level of credit interchange for the UK market would be over 65% higher than the 30bps rate cap imposed in the 2015 Interchange Fee Regulation (“IFR”). At the same time, the court criticized and rejected the ‘merchant indifference test,’ the cornerstone for the IFR. While we are disappointed to see liability as part of the finding, we note that in awarding a limited portion of the claimed damages, the court concluded that Sainsbury’s did not pass through interchange costs to consumers in the form of higher prices.”
Mastercard agreed to pay UK supermarket Tesco Plc $61 million last year to settle a separate lawsuit over the fees.