Expert testimony from Dr Trento contributes to successful outcome for merchants in Merchant Interchange Fee Umbrella Proceedings

The UK Competition Appeal Tribunal (‘CAT’) ruled that there is no evidence that the vast majority of retailers passed on any of the losses they incurred from Visa’s and Mastercard’s unlawful interchange fees to their own customers. The Trial 2 judgment in the Merchant Interchange Fee Umbrella Proceedings is a successful outcome for thousands of UK and European merchants. Testimony by Compass Lexecon’s expert Dr. Stefano Trento, on behalf of merchant claimants, was key in obtaining this positive result.

Situation

In its Trial 1 judgement in the Merchant Interchange Fee Umbrella Proceedings from June 2025, the UK CAT ruled that the interchange fees set by Visa and Mastercard infringe Article 101(1) TFEU and the Chapter I Prohibition of the Competition Act 1998. Multiple merchants claimed damages for the losses they incurred, but Visa and Mastercard argued that those losses were passed on to merchants’ customers. Trial 2 dealt with these questions of damages and pass-on.

Our role

A team from Compass Lexecon instructed by Stephenson Harwood, Scott+Scott, and Harcus Parker continued to support a large number of merchants in the proceedings before the CAT. We submitted analyses related to acquirer pass-on (‘APO’ - whether the presumptively unlawful fees resulted in higher charges for merchants) and merchant pass-on (‘MPO’ - whether the presumptively unlawful fees resulted in higher retail prices paid by consumers)in preparation for Trial 2.

Dr Stefano Trento served as economic expert for merchant claimants in Trial 2 and testified on their behalf on the issues of MPO and APO. Other economic experts also submitted evidence on behalf of Visa and Mastercard and testified on their estimates for the pass-on rates. However, the CAT concluded that “Dr Trento had the better approach”, that they “would have gone with Dr Trento’s proxy”, and that his approach to the sectorisation of claimants was “credible and appropriate”.

Outcome

Dr. Trento’s expert testimony on the level of pass-on to customers (merchant pass-on) was key in delivering a positive result for the merchant claimants. The CAT ruled that Visa and Mastercard had not demonstrated that the merchants had passed on the losses suffered from the unlawful interchange fees to their customers, entitling the merchant claimants to damages from Visa and Mastercard.

The team

Dr Stefano Trento was supported by a Compass Lexecon team including Neil Dryden, Peter Bönisch, Francisco Franchetti, Florian Mockel, Peter Ormosi, Roberto Venturini, Bartosz Redlicki, Valerio Serse, Tom Bowman, Gwilhem Charbonnier, as well as a large number of economists and (senior) analysts. 

Stefano and his team worked closely with legal teams from Stephenson Harwood LLP (Genevieve Quierin, Adam Polonsky, Trudy Feaster-Gee), Scott+Scott UK LLP (Cian Mansfield, James Hain-Cole, Belinda Hollway), and Harcus Parker (Tom Ross, Jeremy Robinson), as well as barristers Kieron Beal KC and Flora Robertson from Blackstone Chambers, Philip Woolfe KC and Reuben Andrews from Monckton Chambers and Oscar Schonfeld from One Essex Court.