Sainsbury's Supermarkets Ltd v Visa Europe Services LLC & Ors

Exemption under Article 101(3) requires proof of real, observable and measurable net efficiencies, supported by robust empirical evidence. Economic theory, speculation and broad estimates do not establish the necessary causal link between a restrictive agreement and claimed benefits. The party claiming exemption bears the burden of proof. For the fair-share condition, consumers may include users on both sides of a two-sided market, provided the burdened group receives at least some objective advantage. On the evidence, Visa’s UK multilateral interchange fees generated no proved efficiencies and were not exempt at any level, assuming they restricted competition.

Sainsbury’s claimed damages from Visa’s UK multilateral interchange fees. In an earlier judgment, the court had concluded that the fees did not restrict competition under Article 101(1), so the claim failed at that stage. The parties nevertheless asked the court to determine whether, on the contrary assumption that the fees were restrictive, any levels could qualify for exemption under Article 101(3), both for Visa’s defence and for calculating any overcharge.

The issues were whether the fees contributed to additional efficiencies, whether consumers received a fair share of resulting benefits, and whether the fees were indispensable.

1. Burden and standard of proof. Visa bore the burden of proving exemption under Article 101(3). The ordinary civil standard applied, but alleged efficiencies required robust, cogent and empirically grounded evidence.
2. Damages. The court rejected applying a percentage discount to reflect a theoretical difference between the burdens of proving exemption and loss. If necessary, the burden of proving an available exempt alternative agreement would fall on Visa.
3. First condition. Visa failed to prove a real causal link between the fees and issuer measures designed to stimulate card use, or that any additional stimulation caused additional card usage and efficiencies. The evidence was principally theoretical, inferential, opinion-based and anecdotal.
4. Second condition. Merchants and cardholders could both be consumers for the fair-share requirement. Benefits to cardholders could therefore be considered, but merchants had to receive at least some objective advantage. The court did not decide whether this condition was otherwise satisfied.
5. Third condition and conclusion. If Visa’s mechanism had been valid and proved, the fee would have been indispensable to it because the proposed alternatives were not reasonably equivalent. Nevertheless, on the contrary assumption that the fees restricted competition, they were not exempt under Article 101(3) and would not have been exempt at any level.

First-instance determination following an earlier judgment in the same proceedings, [2017] EWHC 3047 (Comm), which concluded that the fees did not restrict competition under Article 101(1).