– Author: Simon Zekaria

IN BRIEF
Mastercard and Visa are subject to further UK claims for antitrust damages, with hotel operators Shiva Hotels and Myhotels filing lawsuits at the High Court over alleged losses from inflated card fees, MLex has learned.

Mastercard  and  Visa  are  subject  to  further  UK  claims  for  antitrust  damages,  with  hotel operators Shiva Hotels and Myhotels filing lawsuits at the High Court over alleged losses from inflated card fees, MLex has learned.

Shiva  filed  claims  against  both  card-network  operators.  Myhotels  has  filed  a  claim  against Visa, which hasn’t yet been “sealed” by the court. Each of the three claims sees the companies seeking to recover more than 100,000 pounds ($130,000) in compensation.

Shiva  has  five  Hilton-branded  hotels  in  its  portfolio,  with  four  in  London.  Myhotels  has  two London hotels in its portfolio and one in Brighton.

The lawsuits argue that the card networks’ interchange fees were “higher than [they] would otherwise  have  been,”  according  to  documents  seen  by  MLex,  resulting  in  claims  for  losses suffered “as a result of the unlawful fees and rules.”

The hotel operators are also seeking a “declaration” that the relevant fee arrangements “are and have at all material times been void and unenforceable.”

Mastercard and Visa have faced a slew of competition-related actions over their interchange fees,  which  started  after  the  European  Commission  declared  the  level  of  the  fees  to  be illegal.

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.

Litigants  say  the  fees  restrict  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.

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