Case against Mastercard on overcharging 4.5cr people blocked
A £14 billion (?1.17 lakh crore) class-action lawsuit against Mastercard, for allegedly overcharging over 4.5 crore people in Britain over a 16-year period, was blocked by a court. The tribunal found no individual could receive compensation equal to the loss actually suffered. Had it been allowed, the case would have been the largest and most complex in British legal history.
A £14bn class-action lawsuit against MasterCard for allegedly overcharging more than 45 million people in Britain over a 16-year period was blocked by a British court on Friday. The competition appeal tribunal (CAT), a newly empowered court that oversees Britain?s fledgling class action regime, ruled that it would not grant the necessary collective proceedings order for the case to continue to trial. Had it been allowed to proceed, the case would have been the largest and most complex in British legal history and would have tested the limits of the new Consumer Rights Act, which introduced US-style ?opt-out? collective class actions for breaches of UK or European Union competition law in 2015. MasterCard welcomed the judgment, saying the claim was ?completely unsuitable? to be brought under the collective action regime.A law firm, Quinn Emanuel Urquhart & Sullivan, launched the case on behalf of adults in Britain after MasterCard lost a drawn-out appeal against a 2007 European commission decision that ruled its fees were anti-competitive. The case centred on so-called interchange fees, the charges levied by credit and debit card companies such as MasterCard on merchants? banks, which card companies say cover the costs of operating card services, security and innovation. It alleged these fees were a significant cost for retailers and were passed on through increased prices of goods and services to all UK consumers, including those who paid in cash and not just MasterCard holders. London-based Walter Merricks, a lawyer who once led the Financial Ombudsman Service group that handles consumer disputes with banks and who is the representative named on the proposed action, said he was considering an appeal with his advisers. ?The new collective action regime was introduced by the Consumer Rights Act to overcome the difficulty for consumers seeking to recover losses from competition law infringements,? he said. ?I am concerned that this new regime, designed to benefit consumers, may never get off the ground.? He added that concerns cited by the tribunal, which included the difficulties in providing evidence that MasterCard fees were passed on to consumers and in precisely calculating individual losses for so many consumers, could have been overcome. The planned lawsuit had been dubbed by one lawyer the ?perfect exam question? for Britain?s CAT, nominated in 2015 to oversees the country?s maiden ?opt-out? class action lawsuits in antitrust cases. Under the regime, UK-based members of a defined group are automatically bound into legal action unless they opt out. Critics say such regimes encourage claims without merit. But others argue they are designed to offer a more effective and economic route to compensation for UK-based consumers and businesses that fall victim to anti-competitive conduct and saves on hefty advertising costs to rally a large group together.The high court ruled in January that MasterCard had charged interchange fees at a lawful level and without restricting competition in a similar dispute with retailers. 