Credit Cards, Counterfactuals, and Antitrust Damages - The UK MasterCard Litigations

Journal of European Competition Law and Practice 2018

25 Pages Posted: 23 Aug 2017 Last revised: 13 Jan 2020

See all articles by Cento Veljanovski

Cento Veljanovski

Case Associates; Institute of Economic Affairs

Date Written: August 15, 2017


The English courts in Sainsbury’s v. MasterCard and Morrisons v. MasterCard came to opposite conclusions on the illegality of MasterCard’s multilateral interchange fees (MIFs). While both courts posited bilateral counterfactuals, the Competition Appeal Tribunal (CAT) in Sainsbury’s held that this was a realistic counterfactual and that MasterCard had infringed Article 101(1); while the High Court in Morrisons found that the bilateral counterfactual was not realistic because MasterCard would not survive if faced with competition from Visa’s higher interchange fees. The courts also used very different methods to calculate the counterfactual interchange fee. There is now considerable legal uncertainty facing claimants and MasterCard. Here a critical assessment of the reasoning underpinning the two judgments is undertaken. The central thesis is that the counterfactual approach is flawed because of the constrained nature of and procedural constraints arising in litigation.

Keywords: credit cards, counterfactual, interchange fees, two-sided markets, merchant indifference test, MasterCard, Visa, damage litigation

JEL Classification: D4, K0, K21, L1, L4, L11, L12, L13, K14, L41, L44, N60

Suggested Citation

Veljanovski, Cento, Credit Cards, Counterfactuals, and Antitrust Damages - The UK MasterCard Litigations (August 15, 2017). Journal of European Competition Law and Practice 2018, Available at SSRN: or

Cento Veljanovski (Contact Author)

Case Associates ( email )

96 Kensington High Street
London, W8 4SG
United Kingdom
+44 (0)20 73764418 (Phone)


Institute of Economic Affairs

2 Lord North Street, Westminster
London, SW1P 3LB
United Kingdom

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