Photographer: Andrew Harrer/Bloomberg

Sainsbury Wins $91 Million in Mastercard Fee Dispute in U.K.

  • Retailer’s win is the first judgment in series of lawsuits
  • Ruling comes ahead of 19 billion-pound consumer lawsuit

J Sainsbury Plc was awarded 69 million pounds ($91 million) by a London judge following a long-running dispute over fees charged on card transactions with Mastercard Inc.

Mastercard charges on U.K. credit and debit card transactions restricted competition, according to a Competition and Appeal Tribunal judgment published Thursday.

The judgment is the first in a series of claims brought by retailers in the U.K. and Europe, alleging that Mastercard and Visa charged anti-competitive and excessive fees on debit and credit card transactions. The retailers are seeking combined damages of more than 1.2 billion pounds.

"This marks the first substantial award in a competition damages claim in the U.K., and we believe in Europe,” Sarah Houghton, a lawyer at Mishcon de Reya advising the supermarket chain, said in an e-mail. “It has an importance well beyond the precedent it sets for claims against the Mastercard and Visa schemes.”

The 69-million pound victory is equivalent to more than a day’s sales for Sainsbury, which brought in 23.5 billion pounds last year.

Mastercard agreed to pay U.K. supermarket Tesco Plc $61 million last year to settle a separate lawsuit over the fees.

The ruling follows news that British consumers are preparing a 19 billion-pound class action lawsuit against Mastercard. Walter Merricks, a lawyer who once led the U.K. organization that handles consumer disputes with banks, has hired Quinn Emanuel Urquhart & Sullivan LLP to draft a lawsuit they plan to file by September, according to a July 6 statement. The claim would be the U.K.’s biggest and one of the first filed under the Consumer Rights Act 2015.

Though the ruling resulted in compensation for Sainsbury, the tribunal may have boosted Mastercard’s defense against that class action, after it concluded the retailer didn’t pass the costs to consumers in the form of higher prices, Mastercard said in a statement.

The credit-card provider will take a pretax charge of about $90 million in its second quarter to cover the judgment, it said Thursday in a BusinessWire statement.

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