Judgment

Neutral citation:

[2016] CAT 11

Published:

14 Jul 2016

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Summary:

Judgment of the Tribunal in connection with a claim for damages by Sainsbury’s Supermarkets Ltd (“Sainsbury’s”) against MasterCard Incorporated, MasterCard International Incorporated and MasterCard Europe SA (together “MasterCard”). The claim was issued in the High Court and transferred to the Tribunal by order of Mr Justice Barling dated 1 December 2015.

By its claim Sainsbury’s alleged that a payment scheme operated by MasterCard was an agreement or decision of an association of undertakings which infringed Article 101(1) of the Treaty on the Functioning of the European Union (“TFEU”) and/or the equivalent domestic provision. In particular, Sainsbury’s alleged that the Multilateral Interchange Fee which applied under the MasterCard Scheme in respect of credit and debit card transactions in the UK (the “UK MIF”) restricted competition by object and effect. MasterCard denied that the setting of the UK MIF was an agreement or decision which restricted competition and contended that, if it did restrict competition, the UK MIF was exemptible under Article 101(3) TFEU. MasterCard also argued that Sainsbury’s claim should be barred on the basis of illegality (ex turpi causa) because Sainsbury’s was said to be party to the alleged infringement because of its connection to another company, Sainsbury’s Bank plc, which participated in the MasterCard scheme.

For the reasons given in the Judgment, the Tribunal held that:

• The setting of the UK MIF was an agreement (or agreements) between undertakings and, for at least part of the claim period, was a decision by an association of undertakings.
• The setting of the UK MIF was not a restriction of competition by object under Article 101(1) TFEU.
• The setting of the UK MIF was a restriction of competition by effect under Article 101(1) TFEU. But for the UK MIF, bilaterally agreed Interchange Fees at a lower level would have been agreed in place of the UK MIF.
• The UK MIF is not exemptible under Article 101(3) TFEU.
• MasterCard’s illegality defence fails.
• Taking into account an adjustment to remove the benefit Sainsbury’s received owing to Sainsbury’s Bank plc’s participation in the MasterCard scheme, Sainsbury’s is entitled to recover £68,582,245 in respect of the overcharge in relation to credit cards and £760,406 in respect of the overcharge in relation to debit cards (plus interest).
• Certain further matters, including whether the sum needs to be further adjusted to take account of taxation, are expressly reserved for further argument.

This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.