British supermarket chains Asda and Morrisons have dropped a multi-million-pound lawsuit against Mastercard over prices charged to retailers.
The two parties reached an agreement with the global payments processor and withdrew their claims on Tuesday, according to an order issued by the Competition Appeal Tribunal (CAT). The terms of the payment are confidential.
“We’re happy to have settled and will continue to work with Asda and Morrisons on convenient, safe, and secure electronic payments in their accounts,” a spokesperson for Mastercard said in a report.
A Morrisons spokesperson said: “We have settled our claim and are no longer in dispute with Mastercard.” Asda declined to comment.
The lawsuits were two of several cases brought against Mastercard about so-called multilateral interchange fees (MIFs), which merchants pay credit card companies when consumers use a card to shop.
In 2020, the United Kingdom’s Supreme Court supervised the MIF charged by Mastercard and its rival Visa were an unlawful restriction of competition.
A five-week trial to determine how much compensation Mastercard should pay to Asda and Morrisons was due to begin on Jan 30 but will not take place.
Asda (WMT.N) and Morrisons, two prominent British grocery chains, have settled with Mastercard (MA.N) regarding fees assessed to merchants.
Following a decision made by the two businesses and a ruling issued by the Competition Appeal Tribunal on Tuesday, they negotiated an arrangement with the international payment processor (CAT). The settlement’s terms are kept private.
A Mastercard representative said, “We’re happy to have settled and will continue to work with Asda and Morrisons on suitable, safe, and secure electronic payments in their stores.”
A representative for Morrisons said: “We have resolved our issue and are no longer in conflict with Mastercard.” Asda chose not to respond.
Two lawsuits were fill against Mastercard in connection with so-called multilateral interchange fees (MIFs), in which merchants must pay credit card firms when customers use their cards to make purchases.
In 2020, the United Kingdom Supreme Court found that Mastercard’s and rival Visa’s (V.N.) MIF fees were an illegal form of competition restriction.
Retailers have ramped up a battle against Visa and Mastercard, with more than a dozen influential brands logging fresh legal claims over card payment fees.
The High Court writs, which count Levi, SuperdrAll SaintslSaints as claimants, will pile pressure on the two credit card giants following Amazon’s episode on Visa’s high transaction fees last month.
The fashion chains, reported by lawyers at Stephenson Harwood, seek compensation for historic charging fees in breach of competition laws.
The claims long just days after Amazon said it would block customers from shopping with Visa credit cards on the website in Britain. The e-commerce giant said its move to stop accepting credit cards from Jan 19, blaming Visa’s “high fees” after Brexit.
Visa said the legal battle over interchange fees was unrelated to Amazon’s decision. It previously said it was “disappointed that Amazon is intimidating to restrict consumer choice in the future.”
A representative for Visa added: “Visa considers all claims relating to interchange to be without merit and vigorously defended.”
The Supreme Court judged last year that the fees imposed by both Visa and Mastercard on retailers for every card transaction were a breach of E.U. and U.K. competition law.
Supermarket chains Sainsbury’s, Asda, and Morrisons were among the first to take Visa and Mastercard to court. Sainsbury’s settled with Mastercard in August, but its claim with Visa is still live.
The damages that could be payable to the retailers are yet to be determined.
Industry insiders said there was no wonder that more names have come to the fore to sue Visa and Mastercard as firms predict an outcome for the original issues as early as next year. Meanwhile, others believe they can settle out of court before then.
Mastercard firmly believes that retailers of all sizes derive real value from our network committed to supporting our retail partners to adapt and grow their companies through this challenging time.