Supreme Court Rules Against Visa & Mastercard Over Swipe Fees


Two of the world’s largest credit card companies have suffered another defeat in a long-running legal dispute with supermarket chains over interchange fees.

The UK’s Supreme Court rejected an appeal by Visa Inc. and Mastercard Inc., affirming a lower court ruling that the mandated payments restricted competition.

The Court was unanimous in upholding the decision of the Court of Appeal that the multi-lateral interchange fees (MIFs) charged by Visa and Mastercard infringed EU antitrust rules by illegally restricting competition in the acquiring market.

The landmark ruling comes after years of legal battles between Visa and Mastercard and several major UK retailers over the credit card companies’ bids to assess fees on retailers in the United Kingdom.

The case dates back to 2016, when Sainsbury and other retailers brought legal action against Visa and Mastercard alleging that they charged excessive credit and debit card fees in violation of anti-competitive rules.

At issue is the use of so-called interchange fees charged by banks at rates set by the card companies each time a shopper used a credit card.

In announcing the judgement, Justice Nicholas Hamblen dismissed all grounds of appeal brought by the credit card companies, except one point over the degree of precision required to calculate loss, the so-called broad axe issue.

“The effect of the collective agreement to set the MIF is to fix a minimum price floor for the [merchant service charge],” Justice Hamblen said. “A significant portion of the [charge] is thereby immunized from competitive bargaining and is determined by collective agreement rather than by competition.”

The Court of Appeal had awarded the retailers, including Sainsbury’s, more than £69 million, but the Supreme Court judgment did not specify how much the merchants would be entitled to in repayment. The ruling allows the supermarkets to proceed to a trial on the size of the damages and is expected to pave the way for other cases to be brought to the commercial court.

Mastercard said the decision was not a final ruling and that there will be further court hearings to determine the key issues.


Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.

Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.

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