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On Friday, the Competition Appeal Tribunal (CAT) handed down a significant decision in ongoing litigation challenging Visa and Mastercard’s default multilateral interchange fees (MIFs).

The claimants – a group of over 680 merchants and local authorities that have accepted payments made by Visa or Mastercard credit or debit cards – have brought proceedings against Visa and Mastercard alleging, inter alia, that the MIFs set by those schemes violate EU and domestic competition law. In the course of those proceedings, the claimants applied for summary judgment in reliance on the Supreme Court’s decision in Sainsbury’s v Visa [2020] 1 All ER 807. Visa also applied for permission to amend its Defence to plead reliance on an alternative counterfactual. The CAT heard the two applications together, and recently delivered judgment. 

The CAT allowed Visa’s application to amend its Defence. The amendment addressed an alternative counterfactual for the period after regulatory caps on MIFs came into force on 9 December 2015. In broad summary, Visa argues that if it had been prohibited in setting a positive MIF after 9 December 2015, it would have required that domestic consumer and EEA transactions settle at par unless the issuing bank had previously stipulated that it was only willing to settle on the basis of an interchange fee chosen unilaterally by that issuer. Rejecting the claimants’ submission to the contrary, the CAT held that a “rule that enables each issuer independently to determine the level of its interchange fee is not restrictive of competition”(§41). The CAT therefore concluded that the counterfactual was arguable and allowed the amendment (§44).  

Partly in consequence of that decision, the CAT dismissed the claimants’ summary judgment application (i) in relation to the portion of the claim that post-dates 9 December 2015, and (ii) for the entire claim period, in relation to inter-regional consumer MIFs, commercial card MIFs and Italian domestic MIFs (which were held to be sufficiently different to those considered by the Supreme Court that they could not be summarily determined: §§71, 77, 88).

The CAT granted summary judgment against Visa and Mastercard in relation to UK and Irish domestic and intra-EEA MIFs (and insofar as relevant, Gibraltar and Malta domestic MIFs) up until 8 December 2015. Separately, the CAT also found that Visa had no real prospect of successfully defending the claim on the basis of the acquisition by Visa Inc. of Visa Europe, on the basis that the inter-regional MIF was set by Visa Inc. or on the basis of an ‘asymmetric’ counterfactual.  

Brian Kennelly QC, Jason Pobjoy and Isabel Buchanan acted for Visa.

A copy of the judgment is available here

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