Visa, Mastercard Hit With More UK Swipe Fee Antitrust Claims

Source: Law360 | Source: Melissa Lipman

Visa and Mastercard have been hit with another round of competition claims in the U.K. from a group of London restaurateurs and private clubs, the Bourne Leisure travel group, and discount retailer Poundland, amid a bevy of claims over the credit card giants’ interchange fees.

Claims filed in the Chancery Division of London’s High Court on Friday target both credit card giants on behalf of restaurateurs like Caprice Holdings Ltd. — which runs upscale London dining rooms like The Ivy and Sexy Fish — and several private clubs in Mayfair.

Bourne Leisure Ltd. and a group of a dozen or so related travel operators brought a separate competition case against MasterCard Inc. on Tuesday, as did discount retailer Poundland Ltd.

“We represent a number of merchants, including luxury brands, that were hit extremely hard with various fees every time they accepted Visa and MasterCard payment cards,” said Scott+Scott LLP managing partner David Scott, whose firm filed the Caprice litigation. “The European Commission has condemned many of these types of fees as being anticompetitive. We are looking forward to presenting the cases to the court in England, and to recouping our clients’ losses.”

Representatives for the other parties were not immediately available for comment Wednesday.

The newest set of competition claims come as Visa Inc. and MasterCard have been under siege in the courts for several years over interchange fees.

The litigation intensified when MasterCard lost its appeal in 2014 against a European Commission decision that found the firm had violated EU competition law by setting a minimum price for cross-border interchange fees.

MasterCard has estimated it faces damages claims across Europe in excess of $2 billion, although it notched a significant victory in January in London’s High Court when a judge ruled that between 2006 and 2015 the company had charged its fees at a lawful level without restricting competition.

Visa settled its case with the European Commission in December 2010 and agreed to substantially reduce its interchange fees. But the settlement did not shield the firm from private damages litigation, and it still faces dozens of other claims in the U.K. court.

The commission said in February, however, that it would forge ahead with its investigations into both companies’ interregional interbank fees.

The watchdog sent a formal statement of objections to MasterCard in 2015 accusing the credit card giant of keeping banks from offering retailers lower interchange fees and thwarting cross-border competition. After the commission held an oral hearing on the case, MasterCard said in a May U.S. securities filing that “based upon recent interactions” with the agency it believed it could face a fine of more than $1 billion if the commission ultimately finds against it. A settlement in the case could make the potential penalties lower, but MasterCard said it hoped to know more about the situation in the second or third quarter of the year.

The latest suits come just a few days after 85 retailers and other merchants lodged new claims, including major U.K. retailers like Co-Operative Group Ltd., Pret A Manger (Europe) Ltd. and clothing retailer French Connection U.K. Ltd. Humphries Kerstetter LLP had previously confirmed that it had a group of dozens of firms seeking nearly £300 million in damages over swipe fees.

The Caprice litigation retailers are represented by Scott+Scott UK LLP. The Bourne Leisure and Poundland litigation retailers are represented by Hill Dickinson LLP.

Counsel information for Visa and MasterCard was not immediately available.

The cases are Caprice Holdings Ltd. and others v. Visa Europe Ltd. and others, case number HC-2017-001708; Bourne Leisure Ltd. and others v. MasterCard Inc. and others, case number HC-2017-001728; Poundland Ltd. v. Mastercard Inc. and others, case number HC-2017-001729, all in the High Court of England and Wales.

–Additional reporting by Paige Long. Editing by Emily Kokoll.

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