Mastercard and Consumer Advocate Agree to Settle British Swipe Fee Lawsuit | PYMNTS.com

Mastercard and a consumer advocate reportedly reached an agreement in principle to settle a long-running British lawsuit regarding card fees.

The company and Walter Merricks announced their agreement to settle the case during a Tuesday (Dec. 3) hearing before the U.K.’s Competition Appeal Tribunal (CAT), Reuters reported Tuesday.

The settlement is subject to approval by the CAT, according to the report.

A Mastercard spokesperson said in the report: “We are pleased to have reached an agreement in principle to put this case behind us.”

Merricks said in the report: “I am very pleased that after nearly nine years of litigation with Mastercard, I have agreed to a settlement that I believe will deliver meaningful compensation to class members who choose to come forward to participate in the distribution of the damages.”

The lawsuit was filed in 2016 by Merricks, who is a former Financial Ombudsman, with the backing of law firm Quinn Emanuel. The suit alleged anticompetitive card fees.

The suit accused Mastercard of overcharging close to 60 million British residents over the course of 16 years.

Merricks claimed that the company charged exorbitant “interchange fees” — which retailers pay credit card companies when consumers shop with that card — and that those fees were passed on to consumers in the form of higher retail prices.

Mastercard countered that consumers derived valuable benefits from its payment technology.

When a court decision allowed the case to go forward in December 2020, the case became the first major lawsuit to move forward under the Consumer Rights Act 2015, which penalizes anti-competitive behavior. It stemmed from a European Commission (EC) ruling in 2007 that said Mastercard interchange fees were in breach of competition law.

Interchange fees have been challenged in the United States as well, with critics charging at a Nov. 19 Senate hearing that these fees burden consumers and business and result in higher prices charged for goods and services.

Executives from Visa and Mastercard countered that the payments landscape is competitive and that the size and scale of their networks help deliver value to consumers and businesses, including technical innovations that benefit all stakeholders.