Judgment (CPO Application)

Neutral citation:

[2017] CAT 16


21 Jul 2017



Judgment of the Tribunal on an application by the proposed class representative (“Mr Merricks”) for an opt-out collective proceedings order under section 47B of the Competition Act 1998 (“CA”) (the “CPO Application”).

The proposed collective proceedings would combine follow-on claims for damages arising from a decision of the European Commission of 19 December 2007 (the “EC Decision”) addressed to the proposed defendants (“Mastercard”). In summary, the EC Decision found that, from 22 May 1992 to 19 December 2007, Mastercard had infringed what is now Article 101 of the Treaty on the Functioning of the European Union by in effect setting a minimum price which merchants had to pay to their acquiring bank for accepting payment cards in the EEA, by means of the intra-EEA fallback multilateral interchange fee (the “EEA MIF”) for Mastercard branded consumer credit and charge cards and for Mastercard or Maestro branded debit cards. Mastercard’s appeal against the EC Decision was dismissed by the General Court on 24 May 2012 and a further appeal was dismissed by the Court of Justice on 11 September 2014.

The present case alleges damages that are largely the result of Mastercard’s setting of the multilateral interchange fee which applied as a fallback between banks in the UK (the “UK MIF”). The UK MIF was not at issue in the EC Decision, but it is alleged in the present case that the UK MIF was directly influenced by the EEA MIF. It is further alleged that consumers suffered loss as a result of paying prices to businesses that accepted MasterCard cards which prices were higher than they would otherwise have been had Mastercard not committed the infringement of Article 101 established by the EC Decision. The class on behalf of whom Mr Merricks seeks to bring the claim is defined as comprising individuals who between 22 May 1992 and 21 June 2008 purchased goods and/or services from businesses selling in the UK that accepted Mastercard cards, at a time at which those individuals were both (1) resident in the UK for a continuous period of at least three months, and (2) aged 16 years or over.

Mastercard resisted the CPO Application on various grounds, including distinct grounds relating to the arrangement entered into by Mr Merricks to fund the proceedings (the “Funding Agreement”).

The Tribunal considered whether the CPO Application should be granted on the basis of the criteria in section 47B CA and the Tribunal Rules, and in particular the two statutory conditions which must be satisfied for the Tribunal to make a collective proceedings order, namely:

(i) the claims must be eligible for inclusion in collective proceedings (section 47B(5)(b) CA and rules 77 and 79); and

(ii) the person bringing the proceedings is a person who the Tribunal could authorise to act as the class representative (section 47B(5)(a) CA and rules 77 and 78).
For the reasons given in the Judgment, the Tribunal held that:

(a) the claims should not be certified under rule 79 of the Tribunal Rules as eligible for inclusion in collective proceedings;

(b) if, contrary to (a), the Tribunal had certified the claims, then on condition that the Funding Agreement was amended as proposed, the Tribunal would have authorised Mr Merricks under rule 78 of the Tribunal Rules to act as the class representative.

Accordingly, the CPO Application was dismissed.

This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.