In a significant legal challenge, Mastercard appealed to a London appellate court on Thursday, contesting the jurisdictional basis of a mammoth £10 billion class action lawsuit regarding its swipe fees. The crux of Mastercard's argument is that the jurisdiction covering the bank that processed the payment should govern the lawsuit, not the jurisdiction of the customers who incurred the losses.

The Tribunal's Original Decision

The Competition Appeal Tribunal previously ruled that the claims, alleging that millions of British consumers paid inflated prices due to Mastercard's excessive swipe fees, should be governed by the local laws of the consumers in either England and Wales or Scotland. This decision was a setback for Mastercard, which now seeks to partly overturn this ruling.

Mastercard's Legal Strategy

Mastercard argued that the tribunal's decision contradicts established precedents. The company highlighted a 2018 High Court ruling in Deutsche Bahn v. Mastercard, where it was determined that the restriction of competition was the significant damage, not the losses to the suing companies. Mastercard contends that similar principles should apply in the current case, with the acquiring bank's location being pivotal.

Moreover, Mastercard suggested that varying foreign laws could apply if the tribunal's interpretation stood, complicating the legal landscape and potentially reducing the damages claimable by the class action participants.

Opposition to Mastercard's Appeal

Marie Demetriou KC, representing the claimant Walter Merricks, argued against Mastercard's position, advocating for the retention of the tribunal's original ruling. Demetriou emphasized that the consumer's location should be the determining factor for the applicable law, not the location of the merchant's acquiring bank. This, she argued, aligns with the European Commission's findings and ensures practicality in collective proceedings.

Mastercard Appeals Jurisdiction Ruling In £10B Class Action: Background of the Case

The case stems from a 2007 European Commission decision that found Mastercard had violated EU competition laws with its multilateral interchange fees, also known as swipe fees. Mastercard initially sought to dismiss or reduce the damages claim on the basis that it could have set different fee levels, which might have been exempt from antitrust rules.

Mastercard Appeals Jurisdiction Ruling In £10B Class Action: The Collective Action Framework

This class action is a landmark under the UK’s collective action regime, introduced by the Consumer Rights Act in 2015. This legal framework aims to aid consumers in recovering losses from breaches of competition law. The case has already seen significant developments, including a Supreme Court decision that favored a more lenient standard for certifying antitrust suits for collective action.

The Court of Appeal Deliberates

The appeal is being heard by Court of Appeal Justices Julian Flaux, Nicholas Green, and Richard Snowden, with proceedings expected to continue into Friday.

Representing Mastercard are Sonia Tolaney KC and her team from One Essex Court, alongside counsel from Freshfields Bruckhaus Deringer LLP. Walter Merricks is represented by Marie Demetriou KC, Crawford Jamieson, and their legal team, instructed by Willkie Farr & Gallagher (UK) LLP.

Mastercard's appeal in the £10 billion class action represents a pivotal legal battle over the determination of jurisdiction and applicable law, potentially setting a significant precedent for how international class actions are governed.