Sainsbury’s Supermarkets Ltd v Visa Europe Services LLC & Anor [2017] EWHC 3047 (Comm)

This case – which can be found here – concerns multilateral interchange fees (‘MIF’) yet again. This is one of a number of cases where courts had to decide whether such fees were lawful (for examples, see the cases reviewed in my posts of 30 September 2016, 10 February and 24 March 2017). This one, Sainsbury’s v Visa, is a decision about the lawfulness of Visa’s scheme. The case was brought under the shadow of decisions by the European Commission and a number of courts holding that MasterCard’s MIF scheme was unlawful. In order to understand this case, it is important to first understand how the various credit card systems operate. There are two main credit card models: On the one hand we have three-party schemes, like the ones operated by American Express and Dinner’s Club. In a three-party scheme, the operator (such as American Express) both issues cards and settles transactions with merchants. In other words, when an American…

Walter Hugh Merricks CBE v Mastercard Incorporated and Others [2017] CAT 16

This judgment – which can be found here – concerns the first ever class certification request in an opt-out collective damages claim in the UK. I think this is a very important decision. Class or collective actions allow the aggregation of a large number of small claims for competition damages, and are likely to prove a crucial mechanism for customers seeking to obtain redress for loss caused by a competition infringement. Europe is not familiar with the type of class actions that are typical in North America, and the English courts – and particularly the CAT – are one of the first European courts (if not the first) to have to grapple with the challenges that such claims pose. One very important challenge is class certification, while another is the certification of the class representative. The first opt-out collective claim ever brought in the UK– i.e. Dorothy Gibson v Pride Mobility Products Limited [2017] CAT 9 – ended with the…

Renato Nazzini ‘Arbitrability of Competition Claims in Tort and the Principle of Effectiveness of EU Law’ (2017) European Business Law Review 28(6) 795

This paper – which can be found here – contains a discussion of the recent CDC decision by the Court of Justice of the European Union. It begins with  an overviews of debates about the arbitrability of competition law. Whether competition law matters are arbitrable is a question that is connected to a longstanding debate on the ‘public policy’ nature of competition law (which flows from the wording of the New York convention, but we do not need to go there now). It is widely accepted that while many matters may be subject to arbitration, difficulties arise where a dispute concerns a matter of public importance – such as criminal law or insolvency. For a long time, competition law matters were not allowed to be subject to arbitration on both sides of the Atlantic. In the 1980’s, the US Supreme Court reversed course and explicitly held that competition matters were arbitrable. In Europe, the arbitrability of competition law was implicitly…

Cento Veljanowski “Credit Cards, Counterfactuals, and Antitrust Damages” Journal of European Competition Law & Practice (2018) 9(3) 146–160

This paper – which can be found here – provides an overview of the UK MasterCard litigation. Mr. Veljanowski is likely very well placed to discuss this:  he was one of the two economic experts involved in a case recently decided by the CAT on the matter. He also seems to publish a paper about every court decision concerning the MasterCard litigation (see my post of 24 March 2017, regarding the Arcadia v MasterCard case). The paper begins with a quick overview of the MasterCard litigation. As a result of the European Commission’s MasterCard decision, there are currently about 25 separate standalone and follow-on retailer actions making their way through the English courts concerning MasterCard and Visa’s card systems’ interchange fees. The first decision in these cases was adopted by the CAT last year (Sainsbury v MasterCard). The second one was the Arcadia v MasterCard case I posted about on 10 February. There are also more recent decisions by the…

Eckart Bueren and Florian Smuda ‘Suppliers to a sellers’ cartel and the boundaries of the right to damages in U.S. versus EU competition law’ (2018) European Journal of Law and Economics (2018) 45(3) 397

This article – which can be found here – looks at the loss that suppliers to a downstream sellers’ cartel can suffer as a result of that cartel, and asks whether they are / should be entitled to claim damages for this loss. The paper is structured as follows: It first identifies three economic effects that determine whether suppliers will suffer losses due to a cartel in which their customers participated: quantity, price and cost effects. The quantity effect is a consequence of cartelised prices, which reduce sales and, hence, the amount of supplies needed to produce the cartelised good or service. The price effect is equivalent to the lower price of input products that will result from the reduced demand by cartelists caused by the quantity effect, multiplied by the number of input units sold. And the cost effects reflect the difference in costs of producing a lower number of supply units (e.g. as a result of loss of…

Competition Appeal Tribunal – Written evidence (CMP0042) to the House of Lords in the context of the House of Lord’s inquiry concerning Brexit and competition law and policy

I am linking to this document here  because it addresses the appropriate jurisdictional scope of UK competition law, and how one of the unintended (unconsidered?) effects of Brexit is to increase the exposure of UK markets to foreign conduct with cross-border effects. This is a consequence of the different jurisdictional tests that the UK and the EU apply as regards competition law. As noted in the submission, the UK prohibition against anticompetitive collusive practices: “applies only if the agreement, decision or practice is, or is intended to be, implemented in the United Kingdom (…)There is no corresponding provision in the TFEU as regards Article 101. Moreover, [EU law adopts] a “qualified effects test” as a basis of jurisdiction to apply EU antitrust law: i.e. when it is foreseeable that the multilateral or unilateral conduct in question will have an immediate and substantial effect in the EU.  As the Court explained, this has the objective of preventing conduct which, while not…

Filomena Garcia, Jose Manuel Paz y Mino, Gustavo Torrens ‘Of Course Collusion Should be Prosecuted. But Maybe… (Or the case for international antitrust agreements)’ (2017) CPI

This paper – which can be found here – was written by a number of economists at University of Indiana, and it looks at the incentives of competition authorities to pursue international cartels. A benevolent competition authority with a mandate to maximize national welfare might prefer to delay the prosecution of domestic firms when those firms will benefit from anticompetitive conduct at the expense of foreign consumers. To demonstrate this, the paper develops a simple two-country model of collusion and antitrust policy where there is an industry comprised of two multinational firms that operate in countries with competition agencies. In a first variant of this model, the competition agency of the country where the effects of an anticompetitive practice are felt (country B) will discover this practice only if the agency of the country where the companies are based (country A) starts an investigation. The authors show that country B always prosecutes the colluding firms as soon as there is…

Pierre Huizing ‘Fining Foreign Effects: A New Frontier of Extraterritorial Cartel Enforcement in Europe?’ (2017) World Competition 40(3) 365

This paper – which can be found here – asks whether national competition agencies in Europe (NCAs) have the power to sanction anticompetitive activity taking place outside their territory. The question went unaddressed in Regulation 1/2003, which set up the system of decentralized competition enforcement currently in place in the EU. According to this paper, the members of the European Competition Network (ECN) used to proceed on the basis of a common understanding that each authority would only pursue cross-border cartels for their domestic effects – with the Commission pursuing EU-wide cartels. However, in recent cases some NCAs have departed from this practice and imposed fines that took into account the EU-wide effects of cartels. This article reviews the NCA’s practice as regards the sanctioning of extra-territorial cartel activity, and the academic and political debate about whether this practice is legitimate and appropriate. It does so as follows: Section 2 reviews the enforcement practices of a number of NCAs. It…

Doug Ginsburg and Joshua Hazan ‘Extraterritoriality and Intra-territoriality in US Antitrust Law’ Concurrences No. 3 – 2016, pp. 32

This short paper – which can be found here – looks at case law on the US Foreign Trade Antitrust Improvements Act (FTAIA), which regulates the extra-territorial effects of US antitrust law. A first section provides an overview of how US law has dealt with the issue of extraterritoriality of its antitrust law over time. It notes that: ‘The antitrust laws protect U.S. consumers from foreign and domestic conduct alike; since Judge Hand’s landmark opinion in Alcoa, the U.S. antitrust laws have applied extraterritorially when foreign conduct has a domestic effect. ’ However, effects-based jurisdictional tests are quite broad, and can catch in their net many foreign conducts with limited impact on the US. As a result: ‘In the 1970s, the exercise of jurisdiction by U.S. courts over foreign defendants in antitrust cases caused a good deal of international tension; some of the nation’s major trading partners, including Canada, France, and the United Kingdom, passed “blocking” and “clawback” statutes to…