Sainsbury’s Supermarkets Ltd

By Hayley Pizzey

The Competition Appeal Tribunal (CAT) has ordered MasterCard Incorporated (MasterCard) and others to pay £68.6 million in damages to Sainsbury’s Supermarkets Ltd (Sainsbury’s). The CAT held that MasterCard restricted competition by setting UK Multilateral Interchange Fees (MIFs) between December 2006 and December 2015 (the ‘relevant period’). This judgment represents the largest damages award handed down by CAT, and the final damages award may reach £90 million once interest is added.

90% of the damages related to MIFs, processing fees charged to retailers by MasterCard for MasterCard credit and debit card transactions between the customer and retailer. The CAT considered that if MasterCard had not set MIFs, banks would have agreed lower bilateral interchange fees. The damages reflect the difference between MasterCard’s MIF rates and the lower bilateral fees which would have been paid, over the relevant period.

There are two novel issues that were examined in the judgment: (i) the pass on defence and the causal link; and (ii) the calculation of interest. Each of these is considered below.

The judgment is also the first time the CAT has awarded damages in an Article 101 TFEU[1] claim and the first ‘stand-alone’ competition judgment.