High street retailers who claim that the charges they shoulder for accepting Visa card payments breach competition laws have suffered a serious blow to their case after a judge ruled out the majority of their very substantial damages claim on grounds of delay.
The group of a dozen household name retailers had launched proceedings against a number of companies within the Visa group, attacking the legality of transaction fees known as multilateral interchange fees (MIFs). It was submitted that the level of MIFs was set by Visa and that, in effect, they imposed a minimum price that merchants have to pay their banks for processing Visa card payments. MIFs were alleged to breach both domestic and European competition laws and the retailers argued that they should either not have applied at all or had been set too high.
The retailers’ damages claim against Visa encompassed a period of 37 years, from 1977 to the present, during which illegal MIFs were claimed to have been levied. However, Visa argued that the part of the claim relating to the period before certain dates in 2007 should be struck out. That was on the basis that the six-year time limit enshrined in the Limitation Act 1980 applied to the case.
The retailers submitted that the delay in launching proceedings was due to the late emergence of certain facts relating to MIFs which they could not, using reasonable diligence, have been expected to discover any earlier. In those circumstances, it would be unjust for the time limit to be rigidly applied.
However, in granting Visa the relief it sought and limiting the retailers’ claim to the post-2007 period, the Court noted that it was not a case of a ‘secret cartel’ operating for years without the knowledge of victims or the authorities. The way in which the Visa card payment system operated, and the existence of MIFs, had long been matters of public knowledge and had been notified to the competition authorities.