Competition Appeal Tribunal decides factual causation issues in Merricks collective proceedings

26/02/24

Mr Walter Merricks CBE is the class representative for collective proceedings brought in the Tribunal on behalf of a class of UK consumers against Mastercard. 

Mr Merricks alleges that prices paid by those consumers at merchants between 1992 and 2008 were inflated as a consequence of the multilateral interchange fee applicable to cross-border (intra-EEA) card transactions (the “EEA MIF”).  The EEA MIF was found by a 2008 Decision of the European Commission to be a restriction of competition by effect, contrary to Article 101(1), TFEU.

Mr Merricks alleges that the EEA MIF caused the interchange fees applicable to domestic transactions within the UK to have been higher than they would have been absent Mastercard’s infringement.  He alleges that throughout the period from 1992-2008, the EEA MIF acted as a floor, guidance, benchmark, minimum price recommendation, minimum starting point, and/or minimum level, for UK interchange fees.  The EEA MIF is alleged to have had this effect on UK interchange fees agreed bilaterally between UK banks, and on multilateral interchange fees on UK transactions set by the UK banks and then by Mastercard.

The Tribunal directed a trial of the issue of whether there existed a relevant causal link between the EEA MIF and UK interchange fees in the ‘factual’ world.  It directed that questions as to the ‘counterfactual’ world (in which the EEA MIF was zero or lower than it actually was) were not to be determined in this trial.

The trial of this issue took place in July 2023.  The Tribunal considered documentary and witness evidence spanning the period from the 1980s until 2008, and expert economic evidence.

In a unanimous judgment given today, the Tribunal has found that there was not a relevant causal link in the factual world between the EEA MIF and domestic interchange fees. The judgment finds that throughout the relevant period, the EEA MIF did not have causative influence in any of the ways alleged by Mr Merricks, whether on UK bilateral or UK multilateral interchange fees. 

The Tribunal stated that it had not made any findings as to what the position would have been in the ‘counterfactual’ world, which were not matters for this trial.

The judgment is available here.