The UK's Supreme Court has come down in favor of the UK's biggest supermarket chains in a long-running legal battle over the level of interchange fees charged by Visa and Mastercard.
The Supreme Court unanimously upheld the conclusion of the Court of Appeal that the multi-lateral interchange fees (MIFs) infringed EU antitrust rules by illegally restricting competition in the acquiring market. The landmark ruling concludes several years of economic and legal battle over the rate of interchange fees set by Visa and Mastercard. Many of the UK’s biggest retailers have already lodged substantial claims against the global schemes, with Sainsbury’s et al. previously being awarded over £69 million at the Court of Appeal. "The effect of the collective agreement to set the MIF is to fix a minimum price floor for the [merchant service charge]," Justice Nicholas Hamblen said. "A significant portion of the [charge] is thereby immunized from competitive bargaining and is determined by collective agreement rather than by competition." Callum Godwin, chief of economist at payments consultancy CMSPI, states: "The merchants have succeeded on the major issues and it leaves very little room for manoeuvre for Visa and Mastercard. This is a resounding victory for the merchant community - retailers now have a fantastic opportunity to issue claims off the back of this ruling. Further, this ruling could have major ramifications worldwide" CMSPI is currently supporting over 50 merchants in quantifying and progressing their claims.