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UK Tribunal Halts Proposed Class-Action Lawsuits Against Mastercard and Visa

In the UK, lawsuits against Mastercard and Visa have been suspended.

UK Tribunal Halts Proposed Class-Action Lawsuits Against Mastercard and Visa

The United Kingdom Court of Appeal for Competition last Thursday, June 8, ruled that four claims that were proposed by Commercial and Interregional Card Claims (CICC) cannot currently be considered. At the same time, it was separately stated that lawyers have the opportunity to submit revised proposals within eight weeks.

CICC is a special purpose company that in 2022 filed lawsuits against payment systems, accusing them of involvement in the practice of charging sellers excessive fees in the form of fees for multilateral exchange. The firm initiated a class action on behalf of the merchants, similar to a class action that was registered by the US judicial authorities.

Visa and Mastercard have already had problems in the form of a lawsuit over these fees in the UK. The companies said during the proceedings that the lawsuits would nullify any need for new CICC fees.

In March of this year, payment systems in the United States were able to settle a class action in the amount of $ 5.6 billion. The agreement was reached as a result of proceedings that lasted 15 years.

The settlement agreement, which was approved by the Federal Appeals Court, concerned an antitrust case brought against companies by 12 million sellers who claimed that as a result of the firms’ practice of charging super-competitive fees for payment card transactions they suffered damage.

The settlement resolved the retailers’ claims that the payment card networks overcharged them for the exchange and banned the use of the opportunity to direct customers to other payment methods, in the case of which there is no commission fee.

In the USA last Wednesday, June 7, the law on competition with credit cards was introduced. In this case, financial institutions are obligated to allow customers to make payments through at least one network, which is a competitor to Mastercard and Visa.

Supporters of this law claim that as a result of the new rule, sellers get the opportunity to use the services of payment solution providers whose commission fees are less than the similar tariffs of Mastercard and Visa. Opponents say there is no guarantee that merchants will lower prices for consumers in this case.

President and CEO of the National Association of Federally Insured Credit Unions (NAFCU), Dan Berger described the expansion of control over exchange prices as a bad policy. He also said that such measures are beneficial to large retailers who are interested in increasing profits.

 

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.