A request for class action status for legal claims against MasterCard has been denied by the UK's Competition Appeal Tribunal.
The European Commission decided in December 2007 that MasterCard had infringed EU law by effectively charging shops and other merchants to accept card payments, through “interchange fees”.
Walter Merricks, the inaugural chief ombudsman of the Financial Ombudsman Service, was attempting to bring a £14bn class action on behalf of consumers who may have paid higher prices as a result of this fee.
However, the Competition Appeal Tribunal today refused to grant class action status, which would have group all individual claims together to save legal costs and force MasterCard to pay its dues.
It concluded the case was not suitable for a class action, due to the potentially huge number of affected consumers and difficulties in collecting evidence as to how much they may have lost.
Although this would mean a number of people would get no compensation, “that is effectively the position in most cases of widespread consumer loss resulting from competition law infringements. It does not mean that an application to bring collective proceedings in such a case must always be granted”, the tribunal said in its judgement.
Justice Peter Roth, Said Business School professor Colin Mayer and former chief legal adviser to the Competition Commission Clare Potter sat on the tribunal panel.
"We welcome the Competition Appeal Tribunal's judgment refusing certification for the proposed collective action," a MasterCard spokesperson said in a statement.
But Merricks said he was disappointed and surprised by the ruling, and would consider an appeal.
Marc Israel, of law firm White & Case, said: "This is a real setback for the collective proceedings regime. This is the second case that has failed, following Dorothy Gibson in the mobility scooters cartel case earlier this year.
“It may well deter other potential class representatives from seeking to act on behalf of potential claimants and incurring the time and expense in seeking to become a representative in such cases."
In a similar case in January, brought by a group of retailers including Asda, Morrisons, New Look and Next, MasterCard won a High Court battle around the interchange fees.
But another class action against Visa and MasterCard over interchange fees, brought by law firm Humphries Kerstetter on behalf of a raft of high street retailers, is still underway.