Ian Austin, Partner at European law firm Fieldfisher’s Manchester office, said the Competition Appeal Tribunal awarded damages to Sainsbury’s for excessive multi-lateral interchange fees levied by MasterCard over a six-year period.
He added that the ruling – which has seen Sainsbury’s become the first UK retailer to successfully win damages as a result – has “turned things upside down” and stopped both Mastercard and Visa in their tracks.
“Retailers who accepted MasterCard and Visa credit and debit cards between December 9, 2006 and December 9, 2015, may well have a claim against one or both of these schemes for infringing EU and / or UK competition law,” said Ian.
“Essentially, retailers pay an interchange fee every time a customer uses a credit or debit card. In the Sainsbury’s case multi-lateral interchange fees of around 0.9 per cent of the value of each card transaction, were ruled as too high.
“This has somewhat paved the way for a flood of other claims from retailers, some of which we are already holding conversations with.”
It is understood that other retailers, including WH Smith, Arcadia, Debenhams and John Lewis and car rental company Hertz are bringing similar claims against both Mastercard and Visa over allegedly excessive interchange fees.
This follows the landmark ruling on July 14, 2016, which saw the Competition Appeal Tribunal award Sainsbury’s damages of almost £70m against Mastercard in respect of overpaid multi-lateral interchange fees, therefore breaching competition law between December 9, 2006 and December 9, 2015.
The Competition Appeal Tribunal found that the UK multi-lateral interchange fees paid by Sainsbury’s averaged 0.9 per cent of the value of transactions during the period of Sainsbury’s claim, whereas the bi-lateral interchange fee should have been 0.5 per cent, meaning Sainsbury’s had been overcharged by 0.4 per cent multiplied by the total value of MasterCard credit card transactions in the period of their claim.
Ian said: “There is now a window of opportunity for retailers to recoup this anti-competitive charge.
“We’re happy to look at it and consider sharing risk with clients by obtaining funding to de-risk it.
“We want to get back anti-competitive charges that retailers have suffered, and can help a group of retailers, however large or small.”
He added: “Sainsbury’s recouped almost £70m. This is a hot topic at the moment.”