Sainsbury’s Supermarkets Ltd v Visa Europe Services LLC and others

Sainsbury’s Supermarkets Ltd v Visa Europe Services LLC and others

Visa and Mastercard's MIFs restrict competition in the acquiring market by setting a non-negotiable price floor for merchant service charges, contrary to Article 101(1) TFEU and equivalent UK law. The exemption under Article 101(3) requires cogent empirical evidence of efficiencies and benefits to the affected consumers (merchants), which was not provided. The 'fair share' of benefits must accrue to the adversely affected market, not merely in aggregate across both sides of the market. The quantification of pass-on does not require exactitude; estimation is permissible. The Court of Appeal was correct to hold that the CJEU's Mastercard decision is binding. The Court of Appeal erred in...

Parties
Respondent: Sainsbury’s Supermarkets Ltd; Appellants: Visa Europe Services LLC and others; Appellants: Mastercard Incorporated and others; Respondents: Asda Stores Ltd; Argos Ltd and others; WM Morrison Supermarkets PLC; Intervener: European Commission
Jurisdiction
England and Wales
Judgment Date
17 June 2020
Procedural Posture
Civil Appeal (competition Law) / Supreme Court Judgment
Outcome
Appeals by Visa and Mastercard dismissed on all substantive issues except the 'broad axe' issue; AAM's cross-appeal allowed; Court of Appeal's order remitting AAM proceedings set aside.
Legal Topics
Multilateral Interchange Fees (mifs), Article 101 TFEU, Exemption Under Article 101(3), Standard of Proof, Pass on Defence, Damages Quantification, Two Sided Markets
Competition Law European Union Law Commercial Law Multilateral Interchange Fees (mifs) Article 101 TFEU Exemption Under Article 101(3) Standard of Proof Pass on Defence +2 more

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Parties

Sainsbury’s Supermarkets Ltd

Respondent

Visa Europe Services LLC and others

Appellants

Mastercard Incorporated and others

Appellants

Asda Stores Ltd; Argos Ltd and others; WM Morrison Supermarkets PLC

Respondents

European Commission

Intervener

Procedural Posture

Civil Appeal (competition Law) / Supreme Court Judgment

Legal Issues

  1. 1 Whether Visa and Mastercard's MIFs restrict competition contrary to Article 101(1) TFEU and equivalent national law
  2. 2 Whether the standard of proof for exemption under Article 101(3) TFEU is more onerous than the civil standard
  3. 3 How 'fair share' of benefits under Article 101(3) is to be assessed in two-sided markets

Ratio Decidendi

Visa and Mastercard's MIFs restrict competition in the acquiring market by setting a non-negotiable price floor for merchant service charges, contrary to Article 101(1) TFEU and equivalent UK law. The exemption under Article 101(3) requires cogent empirical evidence of efficiencies and benefits to the affected consumers (merchants), which was not provided. The 'fair share' of benefits must accrue to the adversely affected market, not merely in aggregate across both sides of the market. The quantification of pass-on does not require exactitude; estimation is permissible. The Court of Appeal was correct to hold that the CJEU's Mastercard decision is binding. The Court of Appeal erred in...

Court Disposition

Appeals by Visa and Mastercard dismissed on all substantive issues except the 'broad axe' issue; AAM's cross-appeal allowed; Court of Appeal's order remitting AAM proceedings set aside.

Orders

  • Declaration that Visa and Mastercard's MIFs infringed Article 101(1) TFEU and equivalent UK/Irish law.
  • Declaration that Mastercard failed to prove exemption under Article 101(3) for AAM; no remittal for reconsideration; quantum of damages to be determined.