Asda Stores Ld & Ors v Mastercard Incorporated & Ors [2017] EWHC 93 (Comm) (30 January 2017)

Asda Stores Ld & Ors v Mastercard Incorporated & Ors [2017] EWHC 93 (Comm) (30 January 2017)

The court held that MasterCard's MIFs for consumer credit and debit card transactions in the UK, Ireland, and EEA restricted competition in the acquiring market in breach of Article 101(1) TFEU and equivalent UK and Irish law. The MIFs set a floor on merchant service charges, resulting in higher costs for merchants. The defendants failed to prove that the MIFs were objectively necessary or that they qualified for exemption under Article 101(3). The relevant market was the acquiring market, and the appropriate counterfactual was a zero MIF. The ancillary restraint doctrine did not apply as the MIFs were not indispensable to the operation of the scheme.

Citation
[2017] EWHC 93 (Comm)
Parties
Claimant: ASDA STORES LIMITED; Claimant: ARCADIA GROUP BRANDS LIMITED and others; Claimant: NEXT RETAIL LIMITED; Claimant: B&Q PLC; Claimant: COMET GROUP LIMITED (IN LIQUIDATION); Claimant: NEW LOOK RETAILERS LIMITED; Claimant: ICELAND FOODS LIMITED; Claimant: HOUSE OF FRASER (STORES) LIMITED; Claimant: ARGOS LIMITED and others; Claimant: RECORD SHOP 2 LIMITED (IN LIQUIDATION) and others; Claimant: WM MORRISON SUPERMARKETS PLC; Claimant: DEBENHAMS RETAIL PLC and others; Defendant: MASTERCARD INCORPORATED; Defendant: MASTERCARD INTERNATIONAL INCORPORATED; Defendant: MASTERCARD EUROPE SA; Defendant: MASTERCARD UK MEMBERS FORUM LIMITED; Defendant: MASTERCARD/EUROPAY UK LIMITED
Jurisdiction
England and Wales
Judgment Date
30 January 2017
Procedural Posture
Competition Damages Claim / Phase 1 Trial on Liability and Some Quantum Issues
Outcome
Liability established against MasterCard for anti-competitive conduct; further quantum issues reserved for Phase 2.
Legal Topics
Multilateral Interchange Fees, Article 101 TFEU, Anti Competitive Agreements, Exemption Under Article 101(3), UK Competition Act 1998, Irish Competition Act 2002, Merchant Service Charges, Market Definition, Counterfactual Analysis
Competition Law European Union Law Commercial Law Multilateral Interchange Fees Article 101 TFEU Anti Competitive Agreements Exemption Under Article 101(3) UK Competition Act 1998 +4 more

Case Brief

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Parties

ASDA STORES LIMITED

Claimant

ARCADIA GROUP BRANDS LIMITED and others

Claimant

NEXT RETAIL LIMITED

Claimant

B&Q PLC

Claimant

COMET GROUP LIMITED (IN LIQUIDATION)

Claimant

NEW LOOK RETAILERS LIMITED

Claimant

ICELAND FOODS LIMITED

Claimant

HOUSE OF FRASER (STORES) LIMITED

Claimant

ARGOS LIMITED and others

Claimant

RECORD SHOP 2 LIMITED (IN LIQUIDATION) and others

Claimant

WM MORRISON SUPERMARKETS PLC

Claimant

DEBENHAMS RETAIL PLC and others

Claimant

MASTERCARD INCORPORATED

Defendant

MASTERCARD INTERNATIONAL INCORPORATED

Defendant

MASTERCARD EUROPE SA

Defendant

MASTERCARD UK MEMBERS FORUM LIMITED

Defendant

MASTERCARD/EUROPAY UK LIMITED

Defendant

Procedural Posture

Competition Damages Claim / Phase 1 Trial on Liability and Some Quantum Issues

Legal Issues

  1. 1 Whether MasterCard's multilateral interchange fees (MIFs) for credit and debit card transactions were anti-competitive in breach of UK, Irish, and EU competition law
  2. 2 Whether the MIFs restricted competition in the acquiring market
  3. 3 Whether any exemption under Article 101(3) TFEU or equivalent domestic provisions applied

Ratio Decidendi

The court held that MasterCard's MIFs for consumer credit and debit card transactions in the UK, Ireland, and EEA restricted competition in the acquiring market in breach of Article 101(1) TFEU and equivalent UK and Irish law. The MIFs set a floor on merchant service charges, resulting in higher costs for merchants. The defendants failed to prove that the MIFs were objectively necessary or that they qualified for exemption under Article 101(3). The relevant market was the acquiring market, and the appropriate counterfactual was a zero MIF. The ancillary restraint doctrine did not apply as the MIFs were not indispensable to the operation of the scheme.

Court Disposition

Liability established against MasterCard for anti-competitive conduct; further quantum issues reserved for Phase 2.

Orders

  • Declaration that MasterCard's MIFs for the relevant period and territories were anti-competitive and unlawful under Article 101 TFEU, UK Competition Act 1998, and Irish Competition Act 2002.
  • Directions for further hearing to determine quantum of damages.