Dune Group Limited & Ors. v Visa Europe Limited & Ors

For Article 101(1), the counterfactual must reflect the realistic and likely competitive situation absent the challenged arrangement. It need not remove the competition concern identified in the actual arrangement. A regulatory cap may make unilateral or bilateral fee-setting models arguable, even where similar competitive effects might persist. A common scheme rule may constitute an agreement or concerted practice although the scheme operator alone sets the fee, where issuers and acquirers agree to transact under that rule. Summary judgment is inappropriate where evidence leaves a real prospect concerning the counterfactual, appreciable effect, or collusion.

Traders, service companies and local authorities brought claims against Visa and Mastercard alleging that multilateral interchange fees infringed Article 101 of the TFEU and section 2 of the Competition Act 1998, and that Visa and Mastercard abused dominant positions.

In [2021] CAT 35, the Competition Appeal Tribunal granted summary judgment concerning certain UK, Irish, intra-EEA and related consumer MIFs up to 8 December 2015, but refused it for later periods, inter-regional MIFs, commercial cards and Italian MIFs. The claimants appealed concerning later domestic and intra-EEA consumer MIFs and inter-regional MIFs. Visa cross-appealed concerning the acquisition of Visa Europe by Visa Inc and Visa Inc’s role in setting inter-regional MIFs. The central issues were whether the proposed counterfactuals were arguable and whether the relevant MIF rules appreciably restricted competition.

Newey LJ gave the judgment, with Nugee LJ and Flaux C agreeing.

1. Ground 1 dismissed. Article 101(1) requires comparison with the realistic and likely situation absent the challenged rules. The counterfactual need not eliminate the competition concern identified in the actual arrangement. The [2016] EU:T:2016:379 approach concerns the competitive process in its actual context and likely developments. The [2014] 5 CMLR 23 counterfactual of no MIF with settlement at par was appropriate in the earlier Mastercard litigation, but the Regulation (EU) 2015/751 on interchange fees for card-based payment transactions could have altered the hold-up problem. Visa’s unilateral model and Mastercard’s bilateral model were therefore seriously arguable after 9 December 2015. Summary judgment was rightly refused.
2. The fact that issuers might independently select the maximum fee permitted by the regulatory cap did not itself establish collusion. Article 101 does not prevent economic operators from adapting intelligently to existing or anticipated competitor conduct. Whether either proposed counterfactual involved a collusive arrangement remained a matter for trial.
3. Inter-regional MIFs. An infringement by effect requires an appreciable or perceptible restriction of competition. The evidence left open whether inter-regional MIFs set a floor for merchant service charges or appreciably affected competition, particularly because they applied to a minority of transactions. The CAT was right to refuse summary judgment.
4. Visa Europe acquisition. Visa Inc’s assumption of responsibility for setting European MIFs did not remove the agreement or concerted practice. Issuers and acquirers had agreed to transact under scheme rules and to abide by the MIF set by the operator. The MIF could therefore fix a minimum price floor for the merchant service charge. The acquisition afforded Visa no arguable defence.
5. Visa’s inter-regional cross-appeal. Visa could argue that the no-default-MIF-with-settlement-at-par counterfactual was inappropriate because Visa Europe could not compel overseas issuers to settle at par, and Visa Inc was not a defendant. The absence of an alternative counterfactual and supporting evidence gave Visa a real prospect of defending those claims. The claimants’ appeal was dismissed, Visa’s acquisition ground was dismissed, and the inter-regional cross-appeal was allowed to that limited extent.

1. Court of Appeal (Civil Division). In [2022] EWCA Civ 1278, the claimants’ appeal was dismissed. Visa’s cross-appeal was dismissed concerning the acquisition of Visa Europe but allowed to the limited extent that Visa could defend the inter-regional MIF claims on the proposed counterfactual basis.
2. Competition Appeal Tribunal. In [2021] CAT 35, summary judgment was granted in part concerning specified consumer MIFs up to 8 December 2015, but refused for later periods and inter-regional MIFs.