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CAT hands down landmark interchange fees judgment


The Competition Appeal Tribunal (Barling J, Prof John Beath OBE and Marcus Smith QC) has today handed down judgment in Sainsbury’s Supermarkets Ltd v MasterCard Inc and others. The judgment is not only the first to be handed down by the UK courts on the various claims for damages in respect of the multilateral interchange fees (“MIFs”) set by card payment schemes but is the first under English law to deal with the issue of pass-on.

In the judgment, the CAT found unanimously that:

  • the setting of the UK MIF constituted an agreement, or agreements, between undertakings;
  • while the agreement was not a restriction of competition by object for the purposes of Article 101(1) TFEU and the Chapter I prohibition, it was a restriction of competition by effect;
  • but for the agreement, bilaterally-agreed interchange fees would have been agreed in place of the UK MIF;
  • those bilaterally-agreed interchange fees would have been equivalent to 0.5% of the transaction value for MasterCard credit card transactions and 0.27% for MasterCard debit card transactions – ie, in both cases, lower than the UK MIF actually paid;
  • the UK MIF as set did not meet the conditions for exemption under Article 101(3) TFEU;
  • MasterCard’s argument that Sainsbury’s claim was barred by the principle of ex turpi causa, because Sainsbury’s Bank was an issuing bank under the MasterCard payment scheme, failed;
  • MasterCard’s arguments as to pass-on failed; and
  • Sainsbury’s was entitled to recover an amount equivalent to the extent to which the UK MIF it had paid during the claim period exceeded the amount it would have been charged absent the UK MIF (ie, under the bilaterally-agreed interchange fees), less an amount reflecting the benefit to Sainsbury’s of the unlawful excess in interchange fees received by Sainsbury’s Bank.

The total amount that the CAT has held Sainsbury’s can recover is £68.6 million (subject to any adjustment for tax), plus interest (awarded on a compound basis for 50% of the sums recovered).

The judgment appears here.

Sarah Love appeared for Sainsbury’s, instructed by Miscon de Reya.  Mark Hoskins QC and Hugo Leith appeared for MasterCard, instructed by Jones Day.