CAT ruling on pass-on claims

In a highly significant ruling, the Competition Appeal Tribunal has given practical guidance about how it intends to deal with the issue of pass-on in competition litigation.

Two of the most significant sets of proceedings currently before the CAT – the Merchant Interchange Fee Proceedings and Merricks v Mastercard – involve the issue of pass-on. The Merchant proceedings are brought by a large number of merchants which seek to recover the Multilateral Interchange Fees (or “MIFs”) charged by the Mastercard and Visa schemes. The class representative in Merricks argues that the merchants did not absorb the MIFs but instead passed them on to their consumers by way of higher prices such that consumers – and not the merchants – are the proper claimants. In an attempt to achieve consistency between the two sets of proceedings, the CAT held a joint CMC to determine how to address the issue of pass-on.

In its ruling, the CAT makes a large number of observations about how the issue of pass-on might be addressed in future proceedings, and suggests that there may be additional forms of pass-on beyond those identified by the Supreme Court in Sainsbury’s Supermarkets Limited v. Mastercard Incorporated & Others [2020] UKSC 24. The CAT also gave directions about how to determine the issue of pass-on where there are large numbers of Claimants.       

Laurence Rabinowitz QC acted for Visa, instructed by Milbank LLP and Linklaters LLP. Matthew Cook QC and Ben Lewy acted for Mastercard, instructed by Jones Day and Freshfields Bruckhaus Deringer LLP.  The Judgment is available here.