UK Competition Regulator Says Visa and Mastercard Fees Violate Law

The U.K.’s Competition Appeal Tribunal ruled unanimously Friday (June 27) that Visa and Mastercard’s multilateral interchange fees violate European competition law.

The ruling is the latest round in a long-running legal battle and applies to linked lawsuits brought by hundreds of merchants, Reuters reported Friday.

The claimants’ attorney, David Scott, global managing partner of Scott+Scott, said in the report that the ruling is “a significant win for all merchants who have been paying excessive interchange fees to Visa and Mastercard.”

Both Visa and Mastercard said they will seek permission to appeal the decision, per the report.

“Visa continues to believe that interchange is a critical component to maintaining a secure digital payments ecosystem that benefits all parties, including consumers, merchants and banks,” a Visa spokesperson told Reuters.

“Mastercard strongly disagrees with today’s decision, which is deeply flawed, and will seek permission to appeal,” a Mastercard spokesperson said, per the report.

Visa and Mastercard have faced several challenges to their practices and their fees, including in the United States.

PYMNTS reported June 20 that while a U.S. bill, the Credit Card Competition Act (CCCA), failed to be included in an amendment to the GENIUS Act that is moving through Congress, the debate over regulation of the credit card industry will likely linger.

The CCCA mandates that card issuers offer merchants payment networks other than Mastercard and Visa. Proponents contend that expanding the routing options will have the ripple effect of driving down so-called swipe fees.

The bill is not dead, although it is dormant. It could be reintroduced, possibly as an amendment to other financial services legislation.

In another, separate case, Illinois Gov. J.B. Pritzker signed legislation June 16 that delayed for one year the implementation of the state’s Interchange Fee Prohibition Act (IFPA) that would bar companies from charging interchange fees on the tax and tip portions of credit and debit card transactions.

In another case in the U.K., the Competition Appeal Tribunal approved a settlement in the amount of 200 million pounds (about $274 million) sought by the class representative, Walter Merricks, and Mastercard in a long-running class action lawsuit that was brought against Mastercard over its swipe fees. The settlement involved millions of U.K. consumers.