CAT Refuses to Grant MasterCard Permission to Appeal £68m Cartel Judgment

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The Competition Appeal Tribunal (“CAT”) recently rejected MasterCard’s application to appeal the £68m judgment awarded to Sainsbury’s in July 2016, determining that none of MasterCard’s grounds of appeal had any real prospect of success. 

This refusal demonstrates the potential restrictions faced by parties bringing proceedings before the CAT. Unlike the High Court, the CAT can only give permission to appeal on points of law. The CAT confirmed that this remains the position even if the case originated in the High Court. 

Judgment against MasterCard

In July 2016, the CAT ruled that MasterCard’s restrictions on interchange fees were a breach of competition law and ordered MasterCard to pay Sainsbury’s £68 million. The claim had originally been brought in the High Court but was transferred to the CAT following the implementation of the Consumer Rights Act in October 2015. The transfer was suggested by the judge hearing the case in the High Court and was consented to by the parties.  

Refusal of appeal

On 22 November 2016, the CAT refused to grant MasterCard permission to appeal both the liability and quantum element of its judgment.

Scope of appeal

The right to appeal against a decision from the CAT is narrower than the rights of appeal from the High Court and permission can only be granted on points of law. MasterCard argued that the transfer to the CAT from the High Court and the specific wording of the order that made the transfer (which stipulated that the transfer was not intended to alter, limit or exclude any element of the claim as constituted in the High Court) allowed it to bring an appeal on liability under the wider appeal provisions of the High Court. 

The CAT rejected MasterCard’s arguments, declaring that the transfer order could not be construed as referring to the position on appeal. 

In addition, it was stated that, in any event, MasterCard’s application would fail because its appeal had no real prospects of success. 

Appeal on liability

The CAT based its finding of a restriction of competition on a counterfactual hypotheses (i.e. what the position would have been without the anti-competitive behaviour in question) that was not pleaded by either side. 

MasterCard argued this was wrong but in its ruling, the CAT emphasised that it is not committed to following the preferred counterfactual hypothesis submitted by either of the parties. 

Appeal on damages

MasterCard appealed the damages element of the judgment on three grounds: (i) Sainsbury’s had suffered no loss of profits as a result of the anti-competitive practices and this should have been taken into account; (ii) the CAT’s findings on pass on were erroneous; (iii) the CAT should have considered the extent to which banks would switch from MasterCard to Visa and Amex when assessing Sainsbury’s loss. 

The CAT rejected all these on the basis that they would have no reasonable prospect of success. 

Conclusion

This ruling is interesting, not least as a salutary reminder of the potential restrictions faced by parties bringing proceedings before the CAT rather than the High Court. 

In addition, the CAT’s rejection of MasterCard’s argument that its rights of appeal should be those that would have been available if the case had remained in the High Court, may deter parties from seeking or consenting to a transfer of their claims, or even from bringing their claim directly before the CAT.

Given the significance of the judgment, MasterCard  may well seek leave to appeal from the Court of Appeal.

BLP’s Antitrust & Competition Litigation team

BLP’s Antitrust & Competition Litigation team includes leading practitioners in the field, with many years’ experience of advising on landmark and complex cases at EU and national level, for both claimants and defendants, and across a broad range of competition law and regulatory matters. The team has won a string of awards for its work including  “Competition Team Of The Year” at The Lawyer Awards in June 2015, and Global Competition Review’s “Cartel Litigation of the Year 2015”.  If you would like to find out how we can help you, please get in touch.

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