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Court of Appeal confirms that Mastercard cannot rely on a counterfactual based on an alternative, exemptible interchange fee


The Court of Appeal has upheld the judgment of the Competition Appeal Tribunal on several preliminary issues in the Merricks collective proceedings against Mastercard. The proceedings are follow-on claims based on the Commission Decision that Mastercard’s cross-border EEA multilateral interchange fees (the ‘EEA MIFs’) infringed Article 101 TFEU.  

Mastercard sought to advance a defence that any damages awarded to Class Members should be limited to a counterfactual where Mastercard adopted alternative EEA MIFs which met the criteria for exemption under Article 101(3) TFEU. Mr Merricks maintains that it is impermissible for Mastercard to rely on such an argument and that the correct counterfactual is instead for there to be no or zero default EEA MIFs.

The Competition Appeal Tribunal [2023] CAT 15 found that Mastercard was precluded from relying on alternative, exemptible MIFs for two reasons. First, because the Commission Decision held on its proper construction that Mastercard’s EEA MIFs were not exempt and that finding was binding on Mastercard. Second, because it would be an abuse of process for Mastercard to advance such a defence in circumstances where Mastercard could have sought an exemption from the Commission for alternative EEA MIFs but decided not to do so.  

The Court of Appeal [2024] EWCA Civ 759 has dismissed Mastercard’s appeal on this issue. The Court agreed with Mr Merricks’ submission that, on its proper construction, the Commission Decision held that Mastercard had failed to justify the existence of its EEA MIFs at all. Accordingly, the Commission Decision found that – for the period the Decision covers – Mastercard’s EEA MIFs were unlawful under Article 101(1) TFEU and did not meet the criteria for exemption under Article 101(3) TFEU. Mastercard is therefore precluded from relying on alternative, exemptible EEA MIFs for the purposes of the damages counterfactual because it is bound by the Commission Decision. Although the Court of Appeal could see force in the Tribunal’s analysis of abuse of process, it preferred to leave the point undecided in light of its findings as to the scope of the Commission Decision.

The Court of Appeal also dismissed appeals on two other preliminary issues determined by the Tribunal:

  • The Court refused Mastercard’s appeal in respect of an issue concerning the law applicable to certain of the Class Members’ claims. Mastercard argued that the applicable law in respect of purchases made by consumers in the UK from merchants in foreign countries is the law of the place where the merchant was located. Mr Merricks maintained that the law for all of the Class Members’ claims was instead the place of the residence of the consumer (i.e. England or Scotland). The Court of Appeal agreed with Mr Merricks’ submissions that, under both the common law choice of law rules and the Private International Law (Miscellaneous Provisions) Act 1995, the proper law of a claim is the place of the consumer’s residence.
  • The Court dismissed Mr Merricks’ application for permission to appeal on an issue concerning limitation. Mr Merricks had maintained that claims which arose before 1 October 2015 but which were brought after that date were not subject to limitation defences which had accrued prior to 20 June 2003 (when the original section 47A of the Competition Act 1998 was enacted). The Court of Appeal held that the Tribunal was right to reject that argument.

Marie Demetriou KC and Crawford Jamieson represent Mr Merricks, instructed by Willkie Farr & Gallagher.(UK) LLP