Answering your questions about the claim against Mastercard and Visa
Businesses across the economy have been overcharged for accepting:
- corporate cards; and
- consumer cards used across borders (inter-regionally).
We are seeking compensation for these businesses.
The overcharges come from the fees (known as ‘multilateral interchange fees’ or ‘MIFs’) imposed on banks by Mastercard and Visa as a condition for participating in their card schemes. The banks pass these fees to merchants through merchant service charges: MIFs are the largest part of these charges. We say the MIFs are anticompetitive, unlawful and businesses should get them back.
The case is a new front in the battle against interchange fees. The European Commission (backed by the Court of Justice of the EU) clamped down on consumer card interchange fees on an EU and inter-regional basis, and the Supreme Court of the UK – in the Sainsbury’s case in 2020 – did the same for UK consumer card interchange fees, resulting in a substantial settlement in 2021.
We are launching the case before the UK’s specialist judicial competition body, called the Competition Appeal Tribunal. We refer to this as the ‘CAT’ or the ‘Tribunal’.
Prospective claimants in the case against Mastercard and Visa are businesses accepting card payments for which commercial card and inter-regional MIFs apply. Sectors of particular interest include hotels, airlines, railways, cruise lines, car rental companies, restaurants and pubs/bars, luxury brands, retailers etc.
Prospective claimants are all businesses that accept credit card payments.
There are two pathways for claimants to join the case, depending on size.
If your business turns over, on average, less than £100 million every year (pre-Covid), you are automatically included. All you need to do is register your details with us. You can do so here. If we succeed, you can then get your share of the damages.
If your business turns over, on average, £100 million or more every year (pre-Covid), you will need to ‘opt-in’ formally. You do this in two stages:
- First, you need to register your interest in opting in, by completing the website form.
- Secondly, the CAT must ‘certify’ the claims before they can move forward to trial, and if/when it does so, you will be able formally to opt-in. We will tell you how to do this.
We are claiming damages to compensate businesses for losses they have suffered from excessive interchange fees which we believe are unlawful. We also wish to end these fees for the future.
We believe the case is strong. Competition authorities and courts in the EU and UK have found that MIFs for accepting consumer credit and debit cards were unlawful. Based on their analysis, we say that businesses were also unlawfully charged for accepting corporate cards and consumer cards used across borders (inter-regionally).
These excessive MIFs across the economy could total billions of pounds. Your business could get compensation with interest if the case succeeds.
How much of your revenue comes from credit and debit card payments;
- How much of the credit/debit card payments comes from Mastercard and Visa;
- How much of your Mastercard and Visa revenue comes from corporate cards and consumer cards used inter-regionally; and
- The applicable MIF rates for those cards when they were used.
We argue that MIFs should have been zero. That means the starting point for calculating damages should be the full amount of the MIFs paid in the last six years. Some of the larger claimants will have claims worth tens of millions of pounds or more.
Please contact us if your average annual turnover is £100 million or more and you would like us to estimate the potential value of your claim. We will not charge you for carrying out an estimate on your behalf.
This depends on what your settlement says.
We are happy to review existing settlements to advise whether you still have a claim, and its value.
Many businesses have brought claims against Mastercard and Visa for consumer card MIFs (whether UK or EU). Any settlement that covers only those MIFs still allows you to bring a claim in this case.
This is – simply put – one case. However, for technical and legal reasons, we have structured it as four separate claims:
- Opt-in against Mastercard;
- Opt-in against Visa;
- Opt-out against Mastercard; and
- Opt-out against Visa.
This structure is particularly helpful for opt-in claimants, who may wish to choose whether to pursue their claims against either or both of Mastercard and Visa.
Two English companies will bring the case:
- Commercial and Interregional Card Claims I Limited will apply to be the class representative for the two opt-in claims; and
- Commercial and Interregional Card Claims II Limited will apply to be the class representative for the two opt-out claims.
These two companies have the same director, Stephen Allen, an experienced executive in the travel sector, with in-depth knowledge and experience relevant to many potential claimants. Mr Allen is supported by an Advisory Panel also including in-depth expertise in the hospitality sector.
A class representative has many duties. Among these are:
- To act fairly and adequately in the interests of class members and
- To be free from a material conflict of interest with the common interests of the class members.
The proposed class representatives have instructed Harcus Parker to prepare a litigation plan on their behalf. This plan sets out in detail how the proposed class representative will act fairly and adequately in the interests of class members, including a plan for communicating with class members and a procedure for governance.
We seek to represent businesses of all sizes and from all sectors. To help manage the case, we have structured it as four separate claims:
- Opt-in against Mastercard;
- Opt-in against Visa;
- Opt-out against Mastercard; and
- Opt-out against Visa.
‘Opt-in’ means that a business must actively and formally choose to join the proceedings against Mastercard, Visa or both. This can happen only after the CAT has formally ‘certified’ the opt-in cases to proceed.
‘Opt-out’ means that a business is automatically included among the claimants and must only register its interest. If the CAT certifies the claim, and it then succeeds, registered opt-out claimants will be paid their share of damages.
See Who can join the case? for more on who can join the claim.
We have structured the cases so that:
- Potential opt-in claimants are those with average annual pre-Covid turnover of £100 million or more; and
- Potential opt-out claimants are those with average annual pre-Covid turnover below £100 million.
See What do I have to do if my business is in the ‘out’ category, and by when? on what you can do if your business is a potential opt-in or What do I have to do if my business is in the ‘in’ category, and by when? if your business is a potential opt-out claimant.
If you are a potential opt-out claimant (average annual turnover 2016-2019 below £100 million), we invite you to register your interest here.
It is important to register, to show your support for this claim. If, for any reason, the claims were not to be certified, many businesses would have no financially-viable way to be compensated.
There is no deadline for registering your interest for the opt-out claims. We do encourage you to do so as soon as possible, as your support will help our case before the Competition Appeal Tribunal.
If you are a potential opt-in claimant (average annual turnover 2016-2019 of £100 million or more), we invite you to join the claim.
It is important to register your interest to show support for this case.
We can enter a formal engagement to represent you as an opt-in claimant only when the CAT certifies the claims.
If the CAT does certify the claims, it will make an order, called a Collective Proceedings Order, after which it will set a deadline for opt-in claimants formally to opt-in. We will then approach you to do this.
If you register your interest, we can more easily keep you informed, and tell you it is time to opt in.
If you are potentially an opt-in claimant, you can elect to join either or both of the claims against Mastercard and Visa. If you are concerned about joining a claim against one or the other, we are happy to discuss your concerns. Please call us on 020 81385 617 or email us at commercialcardclaim@harcusparker.co.uk.
Businesses must be able to accept card payments. You may be concerned that joining the claims will damage your business. We understand that. We note, however:
- Many businesses, including global airlines, hotel groups and retailers (in the UK, most notably, Sainsbury’s, Asda and Morrisons), have brought claims against Mastercard and Visa. Some of these claims have since been settled, for example, Sainsbury’s, in 2021.
- We have set-up two companies to act as claimant representatives, to bring the claims on behalf of claimants. The claimant representatives, rather than the claimants, will be front and centre of the publicity around this case.
The case is funded by a third-party litigation funder, Bench Walk Advisers, and the case is fully insured. A claimant will not need to set aside any budget to participate in the case.
If the case does not succeed (on both the opt-in and opt-out sides), claimants will pay nothing – either towards our costs, or towards the other sides.
If the claims succeed, then costs and expenses depend on whether you are in the opt-in or opt-out category. If you are in the opt-in category, a share of the damages will pay for the funding and administration of the case. If you are in the opt-out category, no such deduction will be made.
Potential claimants will need to ask their banks or payment processors for data about the MIFs they have paid. We can support you in making this request. There may be a nominal fee to pay your bank or payment processor for this. The advantage of getting the data is that it allows us to calculate more precisely how much a claimant may be able to get in damages.
Potential claimants that have registered their interest in the claims can request the litigation funding agreement(s) relevant to their claim(s) by emailing commercialcardclaim@harcusparker.co.uk, including “Litigation Funding” in the subject line.
Competition law cases are complex and take time. How much time depends on many things, such as how busy the Competition Appeal Tribunal is and how long the defendants want to continue.
We will be filing the claims soon. We hope the Tribunal will hear our case for certification this year, and possibly also certify the claims before the end of the year or early in 2023. After that, the claims will proceed either until trial (which could be a few years away) or earlier settlement.
We will keep you up to date mainly through the website. We will contact registered potential opt-in claimants directly.
If you are a potential opt-out claimant (that is, your average annual turnover (2016-2019) was less than £100 million) we ask only that you register your details now, so we can contact you about the case through the website, and so you can show your support. If we succeed, you will in most cases need to provide data about MIFs you have paid. We can help you with this.
Businesses with an annual turnover of £100 million or more qualify for the opt-in class actions and will need to register their details by clicking on join the claim. Our engagement for opt-in claimants will be conditional on the Competition Appeal Tribunal certifying that the claim.
If the case is not successful you will not have to pay the costs of bringing the case to trial. You will also not have to pay any share of the costs the other side incurred in defending the case. The case is financed by a third party litigation funder, Bench Walk Advisors, and is fully insured.
The litigation is being led by Harcus Parker alongside a team of leading competition law barristers and an economic expert from the Competition Economists Group.
This is unlikely. A very small number of opt-in claimants may be asked to give evidence on whether and how much they were able to pass on the costs of MIFs to their customers. We can walk you through this process if it becomes relevant.
You can call us on 020 81385 617 to speak to a member of the team or email us at commercialcardclaim@harcusparker.co.uk and we will get back to you.