Scene set for UK’s largest opt-out collective action

MasterCard faces a £19 billion action for damages on behalf of consumers who were overcharged as a result of its interchange fees on payment transactions.  Press reports suggest that a claim is about to be brought by Quinn Emanuel in the Competition Appeal Tribunal which would be the second opt-out collective action to be brought under the UK’s new competition law damages regime introduced with effect from 1 October 2015.

The proceedings have a long administrative history dating back at least to the December 2007 European Commission infringement decision against MasterCard in relation to its cross-border multilateral interchange fees (MIF).  The Commission found that MasterCard had infringed Article 101 TFEU in that the MIF arrangements restricted competition between acquiring banks and increased the costs of accepting cards without leading to efficiencies within the meaning of Article 101(3) TFEU.  On 11 September 2014, the Court of Justice dismissed the appeal and cross-appeals challenging a General Court judgment that upheld the Commission’s original decision.

Assuming that the CAT grants a collective proceedings order, the case would test the boundaries of the new regime. The affected class is potentially extensive comprising all consumers and, conceivably, not only MasterCard holders who paid increased prices for their goods and services as a result of the practices.  This is also an indirect purchaser action for a huge sum of money. 

On paper, it appears to be just the type of case that the new regime was expected to encourage.  However, it can be expected that the case will be fiercely contested as the administrative proceedings have been.  While the trial is not expected to begin until 2018, potential claimants and class representatives in other cases will be watching developments closely.