Credit card companies Visa and MasterCard set fees at an unlawful level that restricted competition, a London appellate court ruled Wednesday. The Court of Appeal confirmed two earlier rulings that the card charges , known as interchange fees, infringed EU competition law reported Bloomberg.
The ruling, which also involved WalMart Stores’ Asda and Wm Morrison Supermarkets, resolved wildly different decisions by judges in the lower courts. The case now goes back to a specialty competition judge to reconsider whether the restrictive practices were justified in the interests of economic efficiency.
“The ruling is a clear blow to Mastercard and Visa, though it left open the possibility to reduce their exposure to damages,” said Aitor Ortiz, an analyst at Bloomberg Intelligence.
At issue is the use of so-called interchange fees, levied by banks at rates set by the card companies each time a consumer’s plastic is swiped at a register. The fees are then passed on to the retailers. Mastercard faces at least 10 lawsuits filed by retailers in the UK totaling as much as US$2 billion in claims, according to Bloomberg Intelligence.
Full Content: Bloomberg
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