LONDON–A British appeals court has ruled in favor of retailers here in a decision against Visa and Mastercard, could now face billions of pounds in damages, according to analysts.
Judge Terence Etherton ruled that fees fixed by Visa and Mastercard restrict competition and are unlawful. According to Bloomberg, the latest court decision “resolved wildly different decisions by judges in the lower courts. The case now goes back to a specialty competition judge to reconsider whether the restrictive practices were justified in the interests of economic efficiency.”
"The ruling is a clear blow to Mastercard and Visa, though it left open the possibility to reduce their exposure to damages," Aitor Ortiz, an analyst at Bloomberg Intelligence, was quoted fees.
At the heart of the case was the interchange fees levied by banks at rates that are set by Visa and Mastercard. Mastercard faces at least 10 lawsuits filed by retailers in the U.K. totaling as much as $2 billion in claims, according to Bloomberg Intelligence,
In a statement, Mastercard emphasized that the appeals court ruling isn’t final and the issue will be reviewed by the Competition Appeal Tribunal. “We continue to firmly believe that retailers derive real value from our network,” Mastercard said in a statement to Bloomberg.
The tribunal, which will consider at what level the fees could be set if any, should take note that Sainsbury’s accepted at its trial that fee levels of 0.2% for debit cards and 0.19% for credit cards would be lawful, the judge said, according to Bloomberg.