In a landmark ruling, the UK Competition Appeal Tribunal determined that Mastercard did not follow regulations in setting interchange rates and must pay £68.5 million in damages to supermarket chain J Sainsbury. Mastercard issued a statement indicating it expects to take a total charge of £90-100 million after interest and other costs related to the dispute are included.
Sainsbury challenged the interchange levels as unjustifiable under the law. This ruling could be the tip of the iceberg, as several other UK and EU merchants are making similar claims totaling over £1 billion. Mastercard already paid nearly £40 million in settlement of a similar case involving retailer Tesco PLC in 2015.
Mastercard is also the subject of a lawsuit by millions of consumers arguing that inflated interchange rates led to higher prices. That case seeks damages in excess of £19 billion.
UK credit interchange is currently capped at 30 basis points under a 2015 regulation, far lower than the unregulated US credit interchange levels.
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