MasterCard Ordered to Pay Sainsbury Millions in Card-Fees Case
15 July 2016 - 2:20AM
Dow Jones News
MasterCard Inc. was ordered to pay U.K. supermarket chain J
Sainsbury PLC 68.6 million pounds ($90.8 million) because fees it
passed on to the grocer were too high, a London judge ruled.
The lawsuit concerned interchange fees that are charged when
credit or debit cards are used. The lawsuit alleged that the
default fees set up by MasterCard were too high.
The judge agreed, writing that merchants have little options
except to accept cards from all card issuers, leaving MasterCard
with the power to set unilateral rates that are higher than they
would otherwise be if MasterCard had negotiated.
The judge wrote that a merchant who considered the default rate
too high would be left with "unattractive alternatives" such as
complaining, refusing to accept cards and charging card users a
surcharge.
A number of U.K. retailers have sued card issuers such as
MasterCard with similar claims.
The judge ruled that credit-card transactions should have had a
fee of 0.5%, rather than 0.9%, and debit-card transactions should
have had a fee of 0.27%, rather than 0.36%, and calculated the
damages based on the difference in rates.
Last month a U.S. federal appeals court panel threw out a $7.25
billion antitrust settlement between Visa Inc. and MasterCard Inc.
and millions of retailers after determining that some of the
merchants covered by the pact weren't adequately represented. That
settlement involved the fees merchants must pay when customers use
cards and the rules Visa and MasterCard impose as conditions for
using their networks.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
July 14, 2016 12:05 ET (16:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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