Transport for London (TfL) has joined the growing number of companies suing MasterCard over claims it charged retailers anti-competitive credit card fees.
The transport body has instructed Eversheds partner Lesley Farrell on its claim. Farrell has also been instructed by Europcar to sue the payment processing giant.
The news has emerged the same week as the mammoth £14bn class action against MasterCard went to its first case management conference in the Competition Appeal Tribunal (CAT).
TfL’s claim is brought on behalf of all of its subsidiaries, including London Underground, London Bus Services, Tramtrack Croydon and Docklands Light Railway.
The claimants allege MasterCard charged it anti-competitive and excessive interchange fees on credit and debit card transactions by customers to buy tickets and top-up Oyster cards.
According to a summary of the claim, “the claimants bore such overcharges when customers made purchases from them using MasterCard payment cards”.
TfL is suing for damages, compound interest and costs although the value of the claim is not yet known.
It joins a raft of high-street retailers suing MasterCard in the High Court over interchange fees, including Sainsbury’s, Arcadia Group, Marks & Spencer, Dixons, Ocado, and WHSmith, bringing claims with a combined value in excess of £1.2bn.
Tesco was suing both MasterCard and Visa but settled both claims, most recently settling with Visa in November for an undisclosed sum.
MasterCard is represented by Jones Day partner Nick Cotter on the bulk of the retailer claims, however the company instead turned to Freshfields Bruckhaus Deringer to defend a £14bn class action brought on behalf of 46 million British consumers by Quinn Emanuel Urquhart & Sullivan.
The mammoth class action had its first CMC on Monday (21 November) during which it was agreed that the pivotal CPO hearing – which will decide whether Quinn Emanuel has permission to continue the claim under the new class action regime – will take place on 18 and 19 January.
President of the CAT Mr Justice Roth will preside over the case, the largest ever brought in the UK.
The statute of limitations for claims against MasterCard has now passed, meaning the Quinn Emanuel claim is the last chance for British consumers to recoup losses as a result of interchange fees.
The claims follow a US settlement in 2012 in which Visa and MasterCard agreed to pay US retailers $7.25bn – the largest antitrust settlement in US history.
The UK litigation was also sparked by a 2007 EU regulatory ruling accusing MasterCard of artificially inflating fees and over-charging retailers on cross-border card transactions. The UK Government subsequently launched a consultation on interchange fee caps, which will come into force in the New Year.
The various claims against both MasterCard and Visa are providing a flood of work for UK and US firms in London.
Mishcon de Reya is acting for Ocado and Sainsbury’s against MasterCard; Morgan Lewis is acting for Sainsbury’s against Visa; Stewarts Law is acting for Arcadia Group, Marks & Spencer and 10 other retailers; Gowling WLG is representing Dixons; Humphries Kerstetter is representing Tesco and WHSmith; and Hausfeld is representing European retailers including Hertz, Deutsche Bahn and Metro.
Sainsbury’s won its claim against MasterCard in September, with the CAT ruling the payment processor must pay it £68.5m in damages. The ruling was the first major interchange fee decision in the competition court. MasterCard has retained its lawyers Jones Day to appeal the decision.
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