For Everything Else, There's... Well, Not Visa

In 2019 at the FIFA Women's World Cup Visa advertised their prodigious services with a marketing campaign led by the headline, 'One Player Can Change The Game'. Well, they got that right. On 17 June that player was Sainsbury's. Prior to the Supreme Court's judgment on the lawfulness of multilateral interchange fees, or 'swipe fees', (MIFs) there had been no UK or European ruling that Visa’s multilateral interchange fee is a restriction of competition. They thought it was all over, well it is now.

The Visa and Mastercard schemes had been under the lens of the court for some time before this landmark ruling, as the European Commission had been biting at their ankles for many years, ably assisted by national competition authorities in a number of jurisdictions. The judgment by the Supreme Court, confirming that the MIFs at issue restricted competition within the meaning of Article 101(1) and, therefore, are unlawful unless exempted under Article 101(3), is a landmark victory for any and all merchants who may have incurred unlawful interchange charges imposed upon them in the UK by the Visa and MasterCard payment card schemes.
 
The ruling raised two points. Firstly, the Treaty of the Functioning of the European Union and Chapter I of the UK Competition Act 1998 is probably the dullest and least memorable title for a statute on record, and secondly the MIFs in issue restricted competition under Article 101 of that tongue-twisting statute. I'm about to nip to Sainsbury's to queue in an endless zig-zag for 45 minutes to pick up a loaf of bread, what relevance will this judgment have to me? Well, potentially a significant effect. The Supreme Court’s judgment will have great implications for the payment card schemes which now have a competition infringement finding against them in relation to their interchange fees from the highest court in the United Kingdom. The fact that the Supreme Court determined that there was no level of MasterCard MIF that was permissible under competition law, means there will be many companies who will want to be compensated for the overcharge they have been paying MasterCard.

Yes, but will it make my meal-for-one by that most chirpy of irritating Cockneys, Jamie himself, any cheaper? Maybe. When assessing potential damages, the matter at issue concerned the degree of precision required in the quantification of mitigation of loss where a defendant to a claim for damages arising out of a breach of competition law (Visa) asserts that the claimant (Sainsbury's) has mitigated its loss through the 'passing on' of all or part of an overcharge to its own customers. The Supreme Court determined that the law requires no greater precision in the quantification of pass-on from the defendant than from a claimant seeking to quantify damages. Get on with it, I'm getting closer to having the handle of my trolley sanitised by someone called Sandra in Crocs, will it make my Chicken Jalfrezi cheaper? Well, not immediately. The appeals will be remitted to the Competition Appeal Tribunal for reconsideration of the evidence on the issue of exemption under Article 101(3) and for the assessment of the quantum of Sainsbury’s respective claims against Visa and MasterCard.

Maybe not immediately, but changes they are a'coming. Save your vouchers.