High Court dismisses interchange fee damages claim against Visa

The High Court handed down its long-awaited judgment on Visa’s multilateral interchange fees (“MIFs”).

Mr Justice Philips dismissed Sainsbury’s claim against Visa under Article 101 finding that interchange fees were not a restriction of competition because, once the need for some default rate of interchange fee was established, there was no reason to deem a positive interchange fee as any more restrictive of competition than an interchange fee set at zero (or “settlement at par”) or indeed one that was negative.  A further judgment is expected, considering what level of interchange fee would qualify for an exemption under Article 101(3) if, contrary to the Court’s findings, Visa’s MIFs had been restrictive of competition.

From an economic perspective, the judgment is novel as it explicitly reflects the learning of the economic literature on two-sided platforms and rejects the notion that an increase in the price on one-side of a two-sided market can be interpreted in and of itself as a restriction of competition.  This is a welcome development given the growing importance of two-sided business models across the wider economy.

Cristina Caffarra was the court expert for Visa Europe on the matter, and the supporting CRA team was led by Oliver Latham and included Ian Small, Bob Stillman, Pierre Regibeau and multiple others.