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Sainsbury’s wins £68.6m refund from MasterCard

MasterCard is to pay £68.6m to Sainsbury’s after losing a Competition Appeal Tribunal hearing over charges imposed on payments with credit and debit cards.

The tribunal in London ruled yesterday that MasterCard had broken EU and UK competition laws as so-called ‘interchange’ fees charged to the supermarket were too high. The decision comes as MasterCard and Visa face a raft of litigation claims brought against them by retailers in the UK and Europe who say the fees on card transactions are anti-competitive and excessive. They are seeking combined damages running into billions of pounds.

MasterCard is also facing a £19bn class action lawsuit from British consumers. The move, which is one of the first filed under the Consumer Rights Act 2015, is being led by former Financial Services Ombudsman Walter Merricks. He said last week that UK consumers “over-paid to the tune of up to £19bn during a period lasting 16 years” and accused MasterCard of holding on to “illegal profits” it made from the system.

“This marks the first substantial award in a competition damages claim in the UK, and, we believe, in Europe,” said Sarah Houghton, a lawyer at Mishcon de Reya advising Sainsbury’s.

“It has an importance well beyond the precedent it sets for claims against the Mastercard and Visa schemes.”

A statement issued by Sainsbury’s said that it had consistently maintained that the level of interchange fees charged in the UK by MasterCard was not justifiable. “While Sainsbury’s is still considering the judgment, Sainsbury’s is pleased that the tribunal has recognised the harm that MasterCard has caused,” the retailer said.

Though the ruling resulted in compensation for Sainsbury’s, the tribunal may have boosted Mastercard’s defence against other class actions. MasterCard commented: “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.”

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