On May 20, the United Kingdom’s Competition Appeal Tribunal delivered its final judgment in the UK Mastercard Settlement, a landmark class action lawsuit brought against Mastercard. The case, which dates back to 2016, accused the global payments company of imposing excessive interchange fees, also known as swipe fees, that were ultimately passed on to consumers through inflated retail prices. The Tribunal has now approved a £200 million settlement that was originally proposed in February, marking a significant resolution in one of the most prominent consumer compensation cases in the country.
The UK Mastercard Settlement was spearheaded by Walter Merricks, a former financial ombudsman, who acted as the class representative for millions of affected UK consumers. The approved agreement includes a notable clause indemnifying Merricks up to £10 million. This indemnity was introduced due to objections raised by Innsworth Capital, the lawsuit’s funder, which had initiated arbitration proceedings claiming the settlement amount was insufficient.
Despite these objections, the Tribunal found the terms of the settlement to be both “just and reasonable.” According to the judgment summary, the likelihood of securing a court judgment significantly exceeding £200 million was low, and the indemnity offered to Merricks did not undermine the fairness of the deal.
Impact on Consumers and Statement from Merricks
The final approval of the UK Mastercard Settlement opens the door for millions of UK consumers to receive compensation, with individual payouts estimated to be up to £70 each, according to The Independent. Merricks hailed the judgment as a “fair and just outcome” that reflects the years of effort put into pursuing justice on behalf of the public.
“Recovering £200 million by way of a settlement for UK consumers is a huge sum,” Merricks said. “That will translate into a meaningful impact in the pockets of UK consumers.”
The case originated from allegations that Mastercard’s interchange fees, the fees charged to retailers each time a customer used a Mastercard, were unfairly high. Merricks argued that these fees led to higher prices for everyday goods and services, effectively burdening consumers over many years. The case set an important legal precedent by being one of the first major class action suits to be certified under the UK’s collective redress system.
Mastercard Maintains Position Amidst Settlement
While Mastercard agreed to settle in the UK Mastercard Settlement, it did not admit liability. The company maintained that its payment systems deliver substantial benefits to both consumers and businesses. Nevertheless, it opted to reach a settlement to avoid prolonged litigation and uncertainty. The agreement in principle was first announced in December 2023, and received preliminary approval in February, pending final documentation and judgment.
The Competition Appeal Tribunal’s final ruling not only affirms the fairness of the compensation package but also signals a victory for consumer rights in the UK. With this decision, years of legal proceedings have culminated in a substantial payout that sets a benchmark for future class actions involving corporate practices and consumer impact.
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