Mastercard has been granted permission to appeal a Federal Court ruling in Australia that compelled the payments giant to disclose internal communications related to its dealings with major retailers.

Several of those retailers are NARTA members.

The ruling stems from legal action initiated by the Australian Competition and Consumer Commission (ACCC), which alleges that Mastercard misused its market power.

 

At the heart of the ACCC’s case is a claim that Mastercard offered large retailers discounted credit-card interchange rates—on the condition that they route the majority of their dual-network debit-card transactions through Mastercard’s network, rather than the lower-cost eftpos system. The ACCC argues this conduct, which began in late 2017, was designed to substantially lessen competition in the debit-card acceptance market.

The original court decision found that Mastercard had waived legal professional privilege in certain communications involving senior executives. As a result, the company was ordered to produce unredacted documents unless a separate privilege claim could be substantiated.

Several members of the National Associated Retail Traders of Australia (NARTA) were named in court documents as parties to the arrangements under scrutiny.

Mastercard is now set to challenge the privilege waiver ruling. If successful, the appeal could restrict the ACCC’s access to sensitive internal communications and strategic documents—potentially reshaping the scope of the regulator’s investigation.

The implications of the appeal are significant. A reversal could limit how deeply the ACCC can probe similar conduct across the financial services and payments sector, particularly in relation to dual-network debit-card routing.

The ACCC launched proceedings against Mastercard Asia/Pacific Pte Ltd and Mastercard Asia/Pacific (Australia) Pty Ltd on 30 May 2022, alleging that the company entered into “strategic merchant” agreements with over 20 major Australian retailers. These agreements allegedly incentivised merchants to favour Mastercard’s network for debit transactions, undermining the Reserve Bank of Australia’s “least-cost routing” (LCR) initiative, which aims to promote competition by allowing merchants to select the most cost-effective network.

The ACCC contends that Mastercard leveraged its dominant position in the credit-card market to gain an unfair advantage in the debit-card space, thereby stifling competition.

The outcome of the appeal will determine the extent to which Mastercard’s internal strategies and communications are made available to regulators—and potentially the public. For regulators, it signals the intensity with which they are prepared to pursue alleged anti-competitive behaviour. For retailers and card scheme operators, it highlights the legal risks associated with network-tying arrangements in a rapidly evolving payments landscape.