Author: Simon Zekaria –

IN BRIEF

Mastercard  and Visa have today been hit with fresh claims  for damages  after  Firmdale Hotels,  a  US-  and  UK-located  boutique  hotel  operator,  filed  lawsuits  at  the  UK’s  High Court  over  alleged  anticompetitive  payment-card  fees,  MLex  has  learned.  Firmdale  is seeking compensation of more than 200,000 pounds from the payment-card companies, according to information obtained by MLex.

Mastercard and Visa have today been hit with fresh claims for damages after Firmdale Hotels, a US- and UK-located boutique hotel operator, filed lawsuits at the UK’s High Court over alleged anticompetitive payment-card fees, MLex has learned.

The two claims, filed separately, say payment charges made by Firmdale were at a level “at all times higher than it would otherwise have been.” Firmdale is claiming damages for losses suffered “as a result of the unlawful fees and rules.”

According  to  the  claims,  Firmdale  also  seeks  a      “declaration”  that  the  relevant  fee arrangements “are and have at all material times been void and unenforceable.”

Firmdale  is  seeking  compensation  of  more  than  200,000  pounds  ($263,000)  —  more  than
100,000 pounds from each of Mastercard and Visa, according to information seen by MLex.

The actions were filed with the UK’s High Court on Sept. 19.

As well as owning hotels in London and New York, Firmdale has restaurants and bars in the
two cities.

Mastercard and Visa have faced a slew of competition-related actions over their “interchange”
fees.

Credit- and debit-card transactions worldwide are engineered around the charges — set by the card networks — which are paid by a retailer’s “acquiring” bank to the cardholder’s “issuing” bank.  The  acquiring  bank  then  deducts  a  “merchant  service  charge,”  including  interchange and other costs, before passing payments on to the retailer.

Multiple  companies  started  actions  over  the  fees  following  European  Commission  rulings against Mastercard and Visa over them.

The decisions have sparked years of litigation.

Companies, regulators and courts have scrutinized whether such fees break competition rules.

Opponents say they pinch competition between acquiring banks in breach of antitrust rules, and drive up costs for retailers and consumers bound to the system. The card networks say the  charges  don’t  impact  on  competition  and  that  they  create  benefits  across  the  payment system that outweigh any negative effects.

Related case file(s)

Antitrust – Visa Inc – MIF – Litigation

Antitrust – Mastercard – MIF – Litigation

 

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