The UK Competition Appeal Tribunal (CAT) has certified the first application for a collective proceedings order (CPO) on an opt-out basis, paving the way for a class-action claim against Mastercard.
In certifying the CPO in Walter Hugh Merricks CBE v Mastercard, — an action brought on behalf of approximately 45 million cardholders and estimated to be worth up to £15 billion — the CAT allows the case to proceed to trial. As established in the UK’s Consumer Rights Act 2015, a CPO is a prerequisite for opt-out collective actions, in which a claim is brought on behalf of all those who fall within a specified class of claimants, except for those claimants who take certain steps to opt-out of the action.
The class action stems from allegations that Mastercard’s card transaction fees (or “interchange fees”) levied between 1992 and 2008 were anticompetitive. More particularly, the claim followed a finding by the European Commission that Mastercard had unlawfully increased the interchange fees charged between banks on Mastercard transactions, which Mr. Merricks (the authorized class representative) claims were then passed on by companies to their customers, causing losses to those who used their Mastercards to purchase goods or services.
The application for the CPO followed a circuitous path. After the CAT refused to grant Mr. Merricks a CPO in 2017, the Court of Appeal reversed that decision. The Supreme Court confirmed the Court of Appeal’s decision in large part and remitted the case back to the CAT for reconsideration. The Supreme Court finding also shed light on the correct approach for the CAT to follow when considering whether claims merit collective proceedings.
Although the opt-out regime has been somewhat slow to take hold, a number of opt-out CPO applications are now waiting in the CAT’s wings, some of which applications had been stayed pending the Supreme Court’s decision. As in Merricks v Mastercard, it is anticipated that the CAT’s decisions in these pending actions will provide more insight into the tribunal’s application of the Supreme Court’s judgment. Although not yet offering a steady green light for additional actions, the CAT’s recent decision can be seen as at least flashing yellow: proceed, but with care.