Mastercard is facing the UK's first mass consumer class action after the Competition Appeal Tribunal approved a £10 billion-plus ($14 billion-plus) claim against the global payments processor. If successful, about 46 million people from Britain could be in line for a £300 payday.
The decision to authorise former financial ombudsman Walter Merricks' five-year case as a collective action came after the UK Supreme Court overruled Mastercard's objections to it in December. It also sets a precedent for a string of other proposed class actions that have been stalled in its wake.
"Mastercard has thrown everything at trying to prevent this claim going forward, but today its efforts have failed," Mr Merricks said in a statement.
"The tribunal's ruling heralds the start of an era of consumer-focused class actions which will help to hold big business to account in areas that really matter."
Mastercard said the claim was being driven by lawyers and backed by organisations "primarily focused on making money for themselves".
Mr Merricks alleges Mastercard charged excessive interchange fees – the fees retailers pay credit card companies when consumers use a card to shop – between May 1992 and June 2008, and that those fees were passed on to consumers when retailers raised prices.
His attempt to expand the scope of the case by adding the estates of the deceased and compound interest to the claim failed, however. Mastercard said this reduced the size of the claim to about £10 billion, at odds with the claimants who value it at £15 billion.
"The decision today reduces the value of this spurious claim by more than 35 per cent," Mastercard said.
"[We are] confident that over the coming months a review of key facts will further significantly reduce [its] size and viability."
Despite Mastercard's pugnacity, the CAT's ruling completes a forgettable few weeks for the payments provider. Last month, it was banned from issuing new credit and debit cards in India for not complying with the country's data storage rules.
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