An evolution of the CAT’s gatekeeper function? Competition Appeal Tribunal refuses UK collective claims against Visa and Mastercard, but Meta-style says PCRs can “have another go”

The UK’s Competition Appeal Tribunal (“CAT”) has unanimously refused to grant the proposed class representatives’ (“PCRs”) four applications for collective proceedings orders (the “CPOs”) against Visa and Mastercard. The Tribunal (Ben Tidswell, Dr Catherine Bell CB and Dr William Bishop) found a “long list of defects” in the PCRs’ applications and observed that any revised proceedings that the PCRs wish to present “will need to overcome a number of hurdles in order for the CPOs to be granted”.

The PCRs now have eight weeks to notify the CAT whether they intend to present revised applications that seek to address the Tribunal’s concerns. The decision follows the approach adopted by the CAT in Gormsen v Meta, where the CAT also stopped short of outright rejecting a certification application on the PCR’s “first go”. 

We note that Linklaters acted for Visa in respect of the proposed CPOs.


In June 2022, the PCRs (Commercial and Interregional Card Claims I Limited and Commercial and Interregional Card Claims II Limited) applied to bring four separate collective proceedings against various Visa and Mastercard entities. In essence, the claims sought to be combined by way of the CPO applications are stand-alone claims of merchants in the UK and/or EU, seeking damages for breaches of competition law said to arise from Visa’s and Mastercard’s imposition of inter-regional and commercial card multilateral interchange fees (“MIFs”) in the period from 1 June 2016. The PCRs are special purpose vehicles that have been established to pursue the claims.

There are four separate proceedings because the PCRs seek to bring both an opt-in and an opt-out claim against each of Visa and Mastercard:

  • The opt-in claims are brought on behalf of all merchants with an average annual turnover in the period 2016-2019 of £100 million and above, that accepted Visa or Mastercard card payments (respectively) in the UK or EU. 
  • The opt-out claims are brought on behalf of all merchants with an average annual turnover in the period 2016-2019 of less than £100 million, that accepted Visa or Mastercard card payments (respectively) in the UK.

The four applications were joined and heard before the Tribunal from 3 to 5 April 2023.

The Tribunal’s decision on certification

The Tribunal unanimously decided not to grant any of the applications:

  • In relation to the opt-out proceedings, the Tribunal found that the requirement that the class be identifiable was not met and that there was a “disregard” for the methodology requirements arising from the Pro-Sys test. 
  • In relation to the opt-in proceedings, a number of issues relating to identification of the class, commonality and methodology flow from the class definition extending to transactions conducted in EU member states. The Tribunal also found that the PCRs failed to advance an appropriate methodology for the issue of infringement.

The PCRs have been sent back to the drawing board, and now have a period of eight weeks to let the CAT know whether they intend to present revised proposals. In the meantime, all four proceedings are stayed.


No methodology for infringement 

  • A central factor driving the Tribunal’s decision was the PCRs’ failure to advance a methodology for infringement.
  • The PCRs’ primary case was that liability for overcharge is established by reference to previous decisions. Visa and Mastercard argued that it has been plain since the CAT’s decision in Dune Group Limited and others v Mastercard and others [2021] CAT 35 (“Dune”) (handed down six months before the CPO applications were filed) that Visa and Mastercard disputed the “read across” from those decisions to cases involving inter-regional and commercial card MIFs. At the certification hearing, the PCRs argued that they had advanced an alternative case to simple reliance on previous binding decisions and suggested they were adopting the methodology which had been employed in Sainsbury’s Supermarkets Ltd v Mastercard Incorporated and others [2016] CAT 11 or, alternatively, relied on the “blueprint” for Trial 1 in parallel individual actions brought against Visa and Mastercard under Case No. 1517/11/7/22 (UM) (the “Umbrella Proceedings”) .
  • The Tribunal found that the PCRs’ approach left the Tribunal “entirely uninformed about both the precise issues and the way in which they are proposed to be dealt with.” The Tribunal was critical of the fact that, despite having the benefit of the detailed explanation of the issues as a result of the CAT’s judgment in Dune and acknowledging the need for a methodology in two of the PCRs’ expert reports, the PCRs made no effort to provide one. The PCRs’ attempts to justify this by reference to the List of Issues in the Umbrella Proceedings was “misconceived”.

Methodology for acquirer pass-on unrealistic and impractical

  • The Tribunal agreed with Visa and Mastercard that the PCRs’ proposed methodology imposes a heavy burden on third parties, going beyond just disclosure, at considerable likely cost and in relation to highly sensitive material. The Tribunal agreed that it seems at least possible that acquirers would resist both the nature and extent of this sort of request and observed that it was not clear that the Tribunal would compel acquirers to provide the full extent of the material the PCRs’ expert report envisaged or that it would even have jurisdiction to make such an order in relation to acquirers who are based outside the UK. Ultimately, however, it found that the PCRs’ methodology for acquirer pass-on was not so defective as to be refused outright, though the Tribunal observed it would expect to see improved proposals in this area before it would be willing to grant the CPOs.
  • The exception to this was in relation to the opt-in proceedings and the potential for non-UK merchants to join those proceedings. The Tribunal doubted the PCRs’ bare assertion that there was unlikely to be any difference required in approach for the acquiring markets of the 27 different countries in which a class member could be present. In any event, there was no attempt to set out a methodology to deal with this issue.

Methodology for merchant pass-on “overly burdensome and disproportionate”

  • The Tribunal found that the PCRs’ merchant pass-on methodology was “overly burdensome and disproportionate” but, as was the case for acquirer pass-on, “not so defective that the applications for CPOs should be refused outright”.
  • The Tribunal observed that the PCRs dealt with the issue of merchant pass-on in a “highly unsatisfactory way” and, as a result, Visa and Mastercard had relatively little opportunity to deal with the PCRs’ methodology on merchant pass-on. In any event, the methodology produced by the PCRs was not consistent with the approach the CAT has previously indicated it favours and instead was more in the nature of “claimant specific evidence adduced from a sample of many thousand claimants”, which the CAT has previously put into the bucket of a “disproportionate and, frankly, hopeless way of deciding the question of pass on”.

Eligibility condition

Opt-out class not identifiable

  • The Tribunal was not satisfied that there was an identifiable opt-out class. This was a consequence of the PCRs’ decision to pursue claims for inter-regional or commercial card MIFs only (rather than other types of MIFs), alongside the opaque nature of blended contracts (where the type of MIF is not an identifiable part of the charging structure), to which over 95% of merchants are subject.
  • The Tribunal found that the PCRs were unable to provide any sensible means by which merchants on blended contracts, or indeed anyone else, could determine whether they had conducted a transaction to which an inter-regional or commercial card MIF applied. It said that it is entirely unrealistic for this information to be obtained from acquirers as the PCRs had proposed, and the Tribunal did not accept the PCRs’ submission that Visa and Mastercard hold the data which could be reasonably expected to resolve this question. 

Opt-in class identifiable

  • The Tribunal was prepared to accept that there was an identifiable opt-in class since businesses with a turnover of £100m and over are likely to have undertaken transactions involving inter-regional and/or commercial cards and are more likely to be aware of and able to evidence that fact. Since the opt-in class is smaller, that also makes the process of requesting information from acquirers easier.

Same, similar or related issues

  • The Tribunal found that the requirement that there be same, similar or related issues was, for the most part, met for both the opt-in and opt-out proceedings. The exception to this was the aspect of the opt-in claims that extend to non-UK merchants. The PCRs provided no analysis or methodology about the position in any of the potential non-UK markets, and the Tribunal was not prepared to assume a commonality of issues in the proposed opt-in proceedings in the absence of proper evidence.
  • As to the requirement that the collective proceedings be an appropriate means for the fair and efficient resolution of the common issues, the Tribunal found that shortcomings in the PCRs’ approach to advancing methodologies in relation to infringement and pass-on made this assessment more difficult than it ought to be.

Relative suitability

  • Visa and Mastercard submitted that a relative assessment of the proposed collective proceedings and the Umbrella Proceedings demonstrated that the Umbrella Proceedings were more suitable for the resolution of claims. The Tribunal accepted that the unusual features of the Umbrella Proceedings meant that the usual comparison needed some adjustment, however found that there was no evidence that many points of “friction” for claimants (e.g., the cost of issuing, the risk of adverse costs, or even the investment of time and effort to recover what may not be a substantial sum) can be presumed to have been removed from the Umbrella Proceedings.

Authorisation condition

  • The Tribunal agreed with Mastercard’s submission that the long list of defects in the CPO applications suggested that they were not being directed as well as they might be, and “were any further or revised applications for collective proceedings to be filed by the current team supporting the PCRs, [the CAT] would hope for and expect a considerably more thoughtful and compliant approach”.
What does the decision mean for the CAT’s approach to certification?

This decision is a welcome sign that the CAT is applying proper scrutiny at the certification stage and takes its gatekeeper function seriously. The CAT emphasised that it is part of that function to satisfy itself that the PCRs are likely to be able to bring a claim to fruition, so as to fully assert the rights of class members which will be extinguished by the collective proceedings. In this context, the Tribunal acknowledged that the situation is particularly acute in the context of the opt-out claim, where the class identification issue has a significant impact on a potentially very large number of merchants who may have no ability to verify whether they accepted inter-regional or commercial cards in the period and therefore are unable to exercise their opt-out rights. The Tribunal emphasised that unless merchants do opt-out, they will lose the ability to pursue their own claim and become subject to how the PCRs present the case and bound by whatever outcome the PCRs are able to secure.

That said, the decision is consistent with the approach the CAT employed in Gormsen v Meta, allowing the PCRs the opportunity to “have another go” at formulating claims. In circumstances where the Tribunal was heavily critical of the PCRs’ conduct, the lack of compliance with the Pro-Sys test in formulating their methodology, and the lack of identifiability of the class, this judgment really begs the question of what a proposed defendant actually has to do to defeat a CPO at certification.