Sainsbury's Supermarkets Ltd v Mastercard Incorporated & Ors (Rev 1)

Sainsbury's Supermarkets Ltd v Mastercard Incorporated & Ors (Rev 1)

Default MIFs set by MasterCard and Visa restrict competition in the acquiring market under Article 101(1) TFEU, as they impose a price floor and limit merchant negotiation. The ancillary restraint doctrine does not justify the restriction, as MIFs are not objectively necessary for four-party card scheme survival. Article 101(3) exemption was not established due to lack of robust empirical evidence of net benefits to merchants. The burden of proof for lawful/exemptible MIF levels lies with the schemes. Damages should not be reduced for pass-on unless proven by defendants. The appeals against the High Court and CAT decisions are allowed, and all cases are remitted to the CAT for...

Parties
Claimant/respondent/appellant: Sainsbury's Supermarkets Limited; Claimant/appellant: Asda Stores Limited; Claimant/appellant: Arcadia Group Brands Limited and others; Claimant/appellant: Argos Limited and others; Claimant/appellant: WM Morrison Supermarkets PLC; Defendant/respondent/appellant: MasterCard Incorporated; Defendant/respondent/appellant: MasterCard International Incorporated; Defendant/respondent/appellant: MasterCard Europe SA; Defendant/respondent/appellant: MasterCard/Europay UK Limited; Defendant/respondent: Visa Europe Services LLC; Defendant/respondent: Visa Europe Ltd; Defendant/respondent: Visa UK Ltd; Intervener: European Commission
Jurisdiction
England and Wales
Judgment Date
04 July 2018
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeals From Competition Appeal Tribunal and High Court
Outcome
Appeals allowed; CAT and High Court decisions set aside in relevant parts; cases remitted to CAT for reconsideration of Article 101(3) exemption and quantum.
Legal Topics
Restriction of Competition, Multilateral Interchange Fees, Article 101 TFEU, Ancillary Restraint Doctrine, Article 101(3) Exemption, Pass on Defence, Quantum of Damages
Competition Law European Union Law Commercial Law Restriction of Competition Multilateral Interchange Fees Article 101 TFEU Ancillary Restraint Doctrine Article 101(3) Exemption +2 more

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Parties

Sainsbury's Supermarkets Limited

Claimant/respondent/appellant

Asda Stores Limited

Claimant/appellant

Arcadia Group Brands Limited and others

Claimant/appellant

Argos Limited and others

Claimant/appellant

WM Morrison Supermarkets PLC

Claimant/appellant

MasterCard Incorporated

Defendant/respondent/appellant

MasterCard International Incorporated

Defendant/respondent/appellant

MasterCard Europe SA

Defendant/respondent/appellant

MasterCard/Europay UK Limited

Defendant/respondent/appellant

Visa Europe Services LLC

Defendant/respondent

Visa Europe Ltd

Defendant/respondent

Visa UK Ltd

Defendant/respondent

European Commission

Intervener

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeals From Competition Appeal Tribunal and High Court

Legal Issues

  1. 1 Do MasterCard and Visa default multilateral interchange fees (MIFs) restrict competition under Article 101(1) TFEU?
  2. 2 Is the setting of default MIFs objectively necessary for the operation of four-party card schemes (ancillary restraint)?
  3. 3 Are the default MIFs exempt under Article 101(3) TFEU?

Ratio Decidendi

Default MIFs set by MasterCard and Visa restrict competition in the acquiring market under Article 101(1) TFEU, as they impose a price floor and limit merchant negotiation. The ancillary restraint doctrine does not justify the restriction, as MIFs are not objectively necessary for four-party card scheme survival. Article 101(3) exemption was not established due to lack of robust empirical evidence of net benefits to merchants. The burden of proof for lawful/exemptible MIF levels lies with the schemes. Damages should not be reduced for pass-on unless proven by defendants. The appeals against the High Court and CAT decisions are allowed, and all cases are remitted to the CAT for...

Court Disposition

Appeals allowed; CAT and High Court decisions set aside in relevant parts; cases remitted to CAT for reconsideration of Article 101(3) exemption and quantum.

Orders

  • Declaration that MasterCard and Visa default MIFs infringe Article 101(1) TFEU.
  • Remission of Sainsbury's v MasterCard, AAM v MasterCard, and Sainsbury's v Visa to CAT for reconsideration of Article 101(3) exemption and quantum.