On 8 June 2023, the Competition Appeal Tribunal (CAT) handed down judgment staying four applications brought under s. 47B of the Competition Act 1998 (CA 1998) for proposed class actions to be certified against Mastercard and Visa.
The proposed class representatives (PCRs) were Commercial and Interregional Card Claims I Limited and Commercial and Interregional Card Claims II Limited (CICC I and CICC II respectively). The PCRs sought to combine standalone claims for damages alleged to have been caused by Mastercard and Visa for alleged breaches of Article 101 TFEU and/or Chapter 1 of CA 1998. The PCRs sought to bring proceedings on behalf of merchants who had paid a merchant service charge in respect of inter-regional and commercial card transactions.
CICC I sought to bring a collective action on an opt-in basis on behalf of a class of merchants with an average annual turnover of £100 million or more who paid a merchant service charge in respect of interregional and/or commercial card transactions which took place (a) in the EU (including the UK) after 1 June 2016 and prior to 1 January 2021 or (b) in the UK on or after 1 January 2021.
CICC II sought to bring a collective action on an opt-out basis on behalf of a class of merchants with average annual turnover of less than £100 million who had paid a merchant service charge in respect of interregional and/or commercial card transactions which took place in the UK after 1 June 2016.
The CAT held that all four proposed collective proceedings did not meet the requirements set out in the CA 1998, the Competition Appeal Tribunal Rules 2015, and the case law on certification, and declined to grant any of the CPOs. One of the requirements is that the proposed class representative put forward a ‘methodology’ setting out how the issues that they have identified will be determined or answered at trial.
In respect of the opt-in proceedings, the CAT held that it was unable to grant a collective proceedings order due to issues which flowed from the class definition extending to transactions conducted in EU member states, and due to the lack of an adequate methodology in respect of infringement.
In respect of the proposed opt-out proceedings, the CAT held that there were issues regarding identification of the class because a large number of merchants would not be able to verify whether they paid merchant service charges in respect of interregional or commercial card transactions. Further, the CAT held that the PCRs had not put forward any methodology in relation to infringement and had concerns about the practicality and proportionality of the methodology advanced for resolving acquirer and merchant pass on issues.
The CAT has stayed all four applications and granted the PCRs a period of eight weeks to notify the Tribunal and the Proposed Defendants of any intention to present revised proposals for any of the proposed collective proceedings.
A summary of the judgment is available here, and the full judgment can be accessed here.
Derek Spitz and Alaina Newnes (along with Michael Bowsher KC and Conor McCarthy of Monckton Chambers) appeared for the Proposed Class Representatives instructed by Harcus Parker Limited.
Sonia Tolaney KC, Matthew Cook KC, and Veena Srirangam (along with Hugo Leith of Brick Court Chambers) acted for the Mastercard defendants, instructed by Freshfields Bruckhaus Deringer and Jones Day.