UK Tribunal Halts Proposed Class-Action Lawsuits Against Mastercard and Visa
Proposed lawsuits against Mastercard and Visa in the United Kingdom have been halted.
The country’s Competition Appeal Tribunal ruled Thursday (June 8) that the four lawsuits proposed by Commercial and Interregional Card Claims (CICC) cannot proceed now but that the lawyers can provide revised proposals within eight weeks.
CICC is a special purpose vehicle that brought the lawsuits last year alleging that merchants were overcharged by the payments processors in the form of multilateral interchange fees, Reuters reported Thursday.
CICC had proposed collective proceedings — the country’s equivalent of a class action in the United States — on behalf of merchants, according to the report.
Visa and Mastercard already face other lawsuits in the U.K. over these fees and argued in this case that those lawsuits negate any need for CICC’s new ones.
In the U.S., the two payments processors settled a class-action lawsuit in March for $5.6 billion after 15 years of litigation.
The settlement, which was approved by a federal appeals court, involved an antitrust case brought against them by 12 million merchants alleging that Visa and Mastercard had injured them by charging supracompetitive fees on payment card transactions.
The settlement resolved retailers’ claims that the payment card networks overcharged them on interchange fees and barred retailers from steering their customers toward other payment methods that did not charge fees.
In other news involving the payment networks in the U.S., the Credit Card Competition Act legislation was reintroduced Wednesday (June 7) with more sponsors from both parties than it’s had before.
This proposed legislation would mandate banks to enable card payments to be routed over at least one network that competes with Mastercard and with Visa.
Proponents say the legislation would give merchants a greater range of choice — because they would have the option to embrace networks with fees, including interchange fees cheaper than those seen with Mastercard and Visa.
Opponents say there is no evidence that merchants would lower prices to consumers even if the bill were to pass.
National Association of Federally-Insured Credit Unions (NAFCU) President and CEO Dan Berger said: “Expanding interchange price controls and routing mandates to credit cards is bad policy, pushed by big box retailers who are looking to pad their bottom line.”
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