Merricks: Mastercard counterfactual arguments fail

On 21 March 2023, the Competition Appeal Tribunal (Tribunal) handed down its first preliminary issues judgment [1] in Merricks v Mastercard. [2]  These issues primarily focus on limitation and exemptibility.


Merricks is an opt-out collective claim made by Mr Merricks against Mastercard on behalf of approximately 45.5 million UK consumers who bought goods or services from businesses who accepted Mastercard debit or credit cards between 1992 and 2008.  

The claim follows on from a European Commission (Commission) infringement decision dated 19 December 2007 (Decision), meaning that the findings of liability in the Decision are binding on the claim. The Commission found that, from 1992 to the date of the Decision, Mastercard’s cross-border European Economic Area (EEA) multilateral interchange fees (MIFs) restricted competition, contrary to Article 101(1) of the Treaty on the Functioning of the European Union (TFEU).  The Commission also found that Mastercard did not meet the criteria in Article 101(3) TFEU, which would make it exempt from the prohibition in Article 101(1) TFEU. 

In Merricks, Mr Merricks argues that the EEA MIFs dealt with in the Decision impacted the domestic MIFs set by Mastercard – in that the domestic MIFs would have been lower but for the unlawful EEA MIFs – and that these MIFs  were passed on by acquiring banks in charges they levied on merchants.  Mr Merricks further argues these charges were then passed on (in whole or in part) to consumers.  While it is common ground that Mastercard is bound by the infringement findings in relation to the EEA MIFs in the Decision, Mastercard denies the causative effect of these EEA MIFs on the domestic MIFs and does not accept that merchants passed on any overcharge to consumers.

Following various hearings and appeals, the claim is now progressing at pace, with the Tribunal deciding at a CMC in September 2022 (with both parties’ agreement) to split the trial into stages in order to case manage the claim more efficiently. [3]  The first stage, broadly comprising of the below issues, was heard in January this year.


As is the norm in competition damages claims, the class members’ loss in Merricks has to be measured on the basis of the counterfactual – i.e. the extent to which, if at all, the prices that class members paid would have been lower if there was no infringement and Mastercard had acted lawfully.  Due to the findings in the Decision, a central aspect of this counterfactual is consideration of the hypothetical position in relation to Mastercard’s EEA MIFs.

In the preliminary issues hearing, Mastercard argued that, notwithstanding the Supreme Court decision in Sainsbury’s [4]  on the binding nature of the Decision, it was free to advance a counterfactual where  a positive EEA MIF would have met the exemption conditions in Article 101(3) TFEU.  Mastercard contended that, while the finding on the restriction of competition in the Decision was a general one, the conclusion on the applicability of Article 101(3) TFEU was limited to the level of MIFs dealt with in the Decision.  Mastercard was therefore entitled to put forward a counterfactual that included a different level of MIFs that met the conditions of Article 101(3) TFEU during the relevant period.

The Tribunal rejected these arguments.  Instead, it unanimously agreed with Mr Merricks’ submissions that the only possible counterfactual was a zero MIF with settlement at par given the binding effect of the Decision. The Tribunal did however note that, for the period after that covered by the Decision, Mastercard could seek to argue that its MIFs meet the conditions in Article 101(3) TFEU provided its arguments were supported by “sound evidence for that purpose”.

The Tribunal also went on to find, in the alternative, that it would be an abuse of process for Mastercard to put forward the counterfactual case set out above. The Tribunal accepted Mr Merricks’ submission that Mastercard had been encouraged by the Commission to provide empirical evidence justifying its MIFs (or any part of it), and was therefore given “every opportunity” to show that the level of MIFs satisfied the exemption conditions.  Allowing Mastercard to raise this issue, which Mastercard had actively chosen not to address in the Commission case, would be an abuse of process.

Limitation / prescription

As set out above, Merricks relates to transactions made between 1992 and 2008.  However, in the preliminary issues hearing, Mastercard argued that the following claims were time-barred: (a) claims governed by English law which related to transactions before 20 June 1997; and (b) claims governed by Scots law which related to transactions before 20 June 1998.  Mr Merricks, on the other hand, contended all claims were within time, largely relying on section 47A(4) of the Competition Act 1998 which states that “[f]or the purpose of identifying claims which may be made in civil proceedings, any limitation rules or rules relating to prescription that would apply in such proceedings are to be disregarded”.

After considering the relevant case law and legislative provisions in detail, the Tribunal held that the time bar arguments advanced by Mastercard were correct.  Drawing on the Tribunal’s judgment in Deutsche Bahn v Mastercard, Peugeot v Citroen,[5] the Tribunal held that it was evident that section 47A had to be read “as a whole” and there was no unlimited statutory requirement to “disregard” limitation or prescription rules.

With respect to the claims governed by Scots law, the Tribunal determined that, given the infringement was part of a wider scheme (and not individual fee-setting decisions) and it was a continuing act by the scheme, section 11(2) of the Prescription and Limitation (Scotland) Act 1973 (PLSA) applied.  Under this provision, the loss and damage were deemed to have occurred on 21 June 2008 (being the date the act, neglect or default was deemed to have ceased) and the five-year prescription ran from then.

On forum, the Tribunal noted that, should there be an appeal on the Tribunal’s determination of the claims governed by Scottish law, it should be dealt with by the Court of Session in Scotland (rather than the Court of Appeal of England and Wales).  The relevant PLSA issue and any appeal would therefore be considered as Scottish proceedings.

Proper law

The Tribunal also considered, for the purposes of limitation and prescription, which law governed claims made by class members on transactions with overseas merchants.  This issue originated from the fact that the claim includes purchases made by class members in the UK from merchants based overseas and selling in the UK.  

The Tribunal rejected Mastercard’s contention that limitation / prescription is governed by the law on limitation / prescription period of the jurisdiction where the merchant’s acquiring bank is based.  Instead, the Tribunal agreed with Mr Merricks’ position and held that, based on the particular facts of the case, the proper law was the jurisdiction where the class member resided at the time it suffered the loss.


The Merricks preliminary issues judgment raises a number of issues that will be applicable not only to the various other interchange fee related proceedings, but also to collective and other proceedings as a whole.  Importantly, it demonstrates the Tribunal’s strict approach to considering exemptibility conditions for counterfactual defences in follow-on claims.  The judgment also provides a clear example of split trials in practice, a method of case management which is likely to become more prominent as more collective proceedings become certified and progress to trial.



[1] Walter Hugh Merricks CBE v Mastercard Incorporated and Others [2023] CAT 15.
[2] Case 1266/7/7/16: Walter Hugh Merricks CBE v Mastercard Incorporated and Others.
[3] See Order of the Chairman of the Tribunal made on 14 October 2022.
[4] Sainsbury’s Supermarkets Ltd and others v MasterCard Incorporated and others [2020] UKSC 24.
[5] Deutsche Bahn AG v Mastercard Inc, Peugeot Citroen Automobiles UK Ltd v Pilkington Group Ltd [2016] CAT 14.