Asda Stores Ld & Ors v Mastercard Incorporated & Ors

Asda Stores Ld & Ors v Mastercard Incorporated & Ors

MasterCard's MIFs for UK, Irish, and EEA credit and debit card transactions did not restrict competition by effect compared to a zero MIF or lower MIF counterfactual, because in such a counterfactual the MasterCard scheme would not have survived due to competition from Visa (the 'death spiral' argument). Even if there was a restriction, the MIFs as set were below the level that would be exemptible under Article 101(3) TFEU, as the value of merchant benefits directly caused by the MIF (including avoided costs, business stealing, online sales, guaranteed payment, and credit functionality) exceeded the MIFs paid. The only exception was for the EEA debit card MIF for the earliest part of the...

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
Civil Commercial Court Trial (competition Law Damages Claim) / Judgment After Phase 1 Trial on Liability and Certain Quantum Issues
Outcome
Claims dismissed except for EEA debit card MIF prior to June 2008, where further quantification may be required.
Legal Topics
Multilateral Interchange Fees (mifs), Article 101 TFEU, Competition Act 1998 (uk), Irish Competition Act 2002, Exemption Under Article 101(3), Ancillary Restraint Doctrine, Counterfactual Analysis, Merchant Indifference Test (mit), Issuer Pass Through, Damages Quantification
Competition Law Commercial Law European Union Law Multilateral Interchange Fees (mifs) Article 101 TFEU Competition Act 1998 (uk) Irish Competition Act 2002 Exemption Under Article 101(3) +5 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

Civil Commercial Court Trial (competition Law Damages Claim) / Judgment After Phase 1 Trial on Liability and Certain Quantum Issues

Legal Issues

  1. 1 Whether MasterCard's setting of multilateral interchange fees (MIFs) for credit and debit card transactions in the UK, Ireland, and EEA was anti-competitive and in breach of UK, Irish, and EU competition law; if so, whether any level of MIF could be exempted under Article 101(3) TFEU or equivalent domestic provisions; and the appropriate counterfactual for assessing restriction of competition and exemption.

Ratio Decidendi

MasterCard's MIFs for UK, Irish, and EEA credit and debit card transactions did not restrict competition by effect compared to a zero MIF or lower MIF counterfactual, because in such a counterfactual the MasterCard scheme would not have survived due to competition from Visa (the 'death spiral' argument). Even if there was a restriction, the MIFs as set were below the level that would be exemptible under Article 101(3) TFEU, as the value of merchant benefits directly caused by the MIF (including avoided costs, business stealing, online sales, guaranteed payment, and credit functionality) exceeded the MIFs paid. The only exception was for the EEA debit card MIF for the earliest part of the...

Court Disposition

Claims dismissed except for EEA debit card MIF prior to June 2008, where further quantification may be required.

Orders

  • Declaration that MasterCard's MIFs as set for UK, Irish, and EEA credit and debit card transactions (except EEA debit card MIF prior to June 2008) were not unlawful and are exempt or exemptible under Article 101(3) TFEU and equivalent domestic provisions.
  • Claimants' claims for damages dismissed except as regards EEA debit card MIF prior to June 2008, for which quantum to be determined if appropriate.