MasterCard (NYSE: MA) suffered a setback in a potentially harmful case heard in Europe. The UK Supreme Court has rejected the company’s request to impose individual lawsuits on interchange fees in the country, rather than the £ 14 billion ($ 18.5 billion) class action case currently under consideration. The vote on the request was tight, with three of the five judges in office voting against and two in favor.
The sprawling lawsuit claims that the intra-European merchant interchange fee charged by Mastercard for personal cards limited competition in the market for a 16-year period ending in late 2007.
The European Commission – the governing body of the European Union’s economic bloc on that continent – issued such a ruling in December 2007. In the UK, it was used as the basis for a case presented by a government ombudsman in a lower court in 2016.
Interchange fees, or “swipes,” are key in the payment card business. They represent a small percentage of each sale charged to the merchant who sells the goods or service.
Mastercard first unsuccessfully challenged the results of the European Commission. It has since changed its legal strategy to challenge the validity of the class action.
If the court ends up awarding the class the full amount, each of the 46.2 million parties in the class action will receive £ 303 ($ 401).
Mastercard has not yet commented on the latest developments in its case. While losing it would undoubtedly be a financial setback, the company generates heaps of money and would likely be able to bounce back in a short time. At the end of its most recent quarter, it had over $ 11.2 billion in cash and equivalents.