Sainsbury’s Supermarket Ltd v MasterCard Incorporated and others

In July of this year, the Competition Appeals Tribunal handed down a significant judgment against MasterCard for breaches of competition law in its setting of multilateral interchange fees.

MasterCard’s way of setting those fees (which are paid by merchants processing credit and debit card transactions via MasterCard) infringed the rules against agreements between businesses which have the effect of disrupting competition within EU markets. The court awarded Sainsbury’s significant damages, finding that the fees in question would have been significantly lower if they had been set in a competitive market.

The Tribunal decided that if MasterCard’s fees had been set in a non-infringing way, Sainsbury’s interchange fees would have fallen from 0.90% to 0.50% for MasterCard credit card and from 0.36% to 0.27% for MasterCard debit cards.

Many companies which paid fees for MasterCard transactions (under their default fees scheme) before those fees were capped under EU law will therefore have a claim against the payment services provider. The result is that lots of prospective claimants are bringing claims against MasterCard – individually or in collective actions, together with other claimants in similar circumstances – with the aim of recovering fees which were improperly charged to them over a number of years. Taylor Wessing is advising a number of clients on their approaches to bringing claims of this kind. Litigation funders are supporting these actions, which can mean that the cost of funding the claim does not give rise to a balance sheet liability for the companies involved.

The Sainsbury’s judgment provides a useful road map for bringing a follow-on claim: the key factual and legal issues in the claims are well established, and relatively easy to assess within a particular business.

Companies which find that they paid multilateral interchange fees to MasterCard under their default scheme should consider whether they can bring a similar claim. While the individual fees are small, many clients are finding that the aggregated sums over the relevant period do represent substantial claims. For portfolio companies which processed significant volumes of MasterCard at the relevant time (before 9 December 2015), there may be an opportunity to recover the sums paid to MasterCard for interchange fees.