OPINION OF ADVOCATE GENERAL

MENGOZZI

delivered on 30 January 2014 ( 1 )

Case C‑382/12 P

MasterCard and Others

v

European Commission

‛Appeals — Competition — Article 81 EC — System of debit, charge and credit card payments — Multilateral fallback interchange fees — Decisions of an association of undertakings — Restrictions of competition by effect — Concept of ‘ancillary restriction’ — Objective necessity — Agreements on multilateral interchange intra-EEA fees applied by MasterCard to cross-border card payment transactions — Conditions for exemption under Article 81(3) EC — Procedure before the General Court — Conditions of admissibility of the annexes to the application’

I – Introduction

1. The present case has as its subject-matter an appeal by the holding company MasterCard Incorporated and its two subsidiaries, respectively MasterCard Inc., MasterCard International Inc. and MasterCard Europe and together ‘the main appellants’, and also two cross-appeals by (i) The Royal Bank of Scotland plc (‘RBS’) and (ii) Lloyds TSB Bank plc (‘LTSB’) and Bank of Scotland plc (‘BOS’) against the judgment of 24 May 2012 in MasterCard and Others v Commission (‘the judgment under appeal’), ( 2 ) in which the General Court dismissed the applicants’ action for annulment of Commission Decision C(2007) 6474 final of 19 December 2007 relating to a proceeding under Article 81 [EC] and Article 53 of the EEA Agreement (Cases COMP/34.579 – MasterCard, COMP/36.518 – EuroCommerce, COMP/38.580 – Commercial Cards) (‘the decision at issue’).

2. The case centres on the payment organisation represented by the appellants (‘the MasterCard payment organisation’ or ‘MasterCard’). That organisation was owned and administered by the affiliated banking institutions until 25 May 2006. On that date, and when the administrative procedure leading to the adoption of the decision at issue was in progress, MasterCard Inc. was the subject of an initial public offering (‘IPO’) on the New York Stock Exchange (United States), which modified its structure and governance.

3. MasterCard operates an ‘open’ (or ‘four-part’) payment card system. Unlike a ‘closed’ (or ‘three-part’) system, such as that operated by American Express, in which the owner of the system itself enters into agreements with cardholders and merchants, an open system, to which different financial institutions may belong under a common card trade mark, entails three levels of interaction: the first between the owner of the system and the affiliated banks; the second between the issuing banks (or issuers) ( 3 ) and the acquiring banks (or acquirers); ( 4 ) and the third between those banks and their respective customers, namely the cardholders and the merchants. ( 5 ) In such a system, the owner of the system, apart from owning and promoting the logo of the payment cards, generally coordinates the practices of the affiliated banks and may act as a network operator, providing an IT infrastructure for the transmission of the electronic messages that close the transactions. It invoices fees and charges to banks for their participation in the system and, where it acts as network operator, fees for processing card payments. ( 6 )

4. The present case concerns, more specifically, the MasterCard decisions setting the multilateral fallback interchange fees which apply by default within the European Economic Area (EEA) or the euro area, that is to say, in the absence of any bilateral agreement between the acquiring bank and the issuing bank or interchange fees set collectively at national level (‘the MIF’). ( 7 ) These fees are paid by the acquiring banks to the issuing banks for any transaction carried out by MasterCard or Maestro branded payment cards ( 8 ) (together ‘MasterCard cards’) between Member States of the EEA or the euro area. In principle, the MIF are included in full in the fees invoiced by the acquiring banks to merchants (‘merchant service charges’ (‘MSC’)) ( 9 ) and thus passed on to merchants as joint production costs. ( 10 ) According to the argument put forward by the main appellants during the administrative procedure, and accepted by the Commission as the basis for its assessment, the MIF are a ‘mechanism for balancing cardholder and merchant demand’ in order to allocate the cost of delivering the service between the scheme’s issuers and acquirers. ( 11 )

5. Until 25 May 2006 the MIF were fixed by MasterCard’s European Board (‘the European Board’), composed of representatives of the banks established throughout the EEA. After that date, only MasterCard’s Global Board, in its new composition, remained competent to take decisions relating to the MIF.

6. In the decision at issue, the Commission considered that the decisions setting the MIF, which it characterised as decisions of an association of undertakings within the meaning of Article 81(1) EC, restrict competition between acquiring banks and thereby infringe that article and Article 53 of the EEA Agreement, in that they amount in fact to setting a minimum price for the MSC. ( 12 ) It therefore ordered the MasterCard payment organisation and the main appellants, under pain of a daily penalty payment, ( 13 ) to bring an end to the infringement within six months, that is to say, by 21 June 2008, by repealing the MIF, ( 14 ) modifying the network rules accordingly, repealing all decisions relating to the MIF ( 15 ) and communicating the actions taken to the financial institutions belonging to the MasterCard network. ( 16 )

7. Before the General Court, the main appellants claimed, primarily, that the Court should annul the decision at issue in its entirety or, in the alternative, annul Articles 3 to 5 and 7 of that decision, in which the Commission set out the abovementioned corrective measures and also the daily penalty. Six financial institutions, including the three cross-appellants, intervened in support of the form of order sought by the main appellants, while the United Kingdom of Great Britain and Northern Ireland and two associations, one representing retailers in the United Kingdom and the other the retail, wholesale and international industry in the European Union, namely the British Retail Consortium (‘BRC’) and EuroCommerce, respectively, intervened in support of the form of order sought by the Commission, which claimed that the Court should dismiss the action. After examining all the pleas raised in support of the principal form of order sought and those raised in the alternative, and declaring certain annexes to the application inadmissible, the General Court dismissed the action and ordered the appellants to pay the costs.

8. On 12 June 2008, MasterCard provisionally repealed the cross-border MIF, while continuing the discussions with the Commission. These discussions eventually led to undertakings by MasterCard concerning, inter alia, the adoption of a new method of calculating the MIF that should substantially reduce the level of the MIF by comparison with the level deemed to be contrary to the Treaty competition rules. ( 17 )

9. By document lodged at the Court Registry on 4 August 2012, MasterCard International Inc. and MasterCard Europe lodged the appeal in the present case. Intervening in support of the form of order sought by them were, in addition to RBS, LTSB and BOS, which also lodged cross-appeals, were MBNA Europe Bank Ltd (‘MBNA’) and HSBC Bank PLC (‘HSBC’). EuroCommerce and the United Kingdom intervened in support of the form of order sought by the Commission, which contends that the appeal should be dismissed.

II – The appeals

A – Admissibility

10. The Commission questions the admissibility of the cross-appeals, on the ground that they do not comply with the procedural conditions laid down in Article 176(2) of the Rules of Procedure of the Court which entered into force on 1 November 2012. That provision, amending the former Rules of Procedure, states that the cross-appeal must be introduced by a document separate from the response.

11. In the present case, the cross-appeals lodged by RBS and by LTSB and BOS were sent by email on 31 October 2012 and the originals of those documents were received at the Court Registry on 2 and 5 November 2012 respectively. According to Article 57(7) of the Rules of Procedure, ‘the date on and time at which a copy of the signed original of a procedural document … is received at the Registry by telefax or any other technical means of communication available to the Court shall be deemed to be the date and time of lodgement for the purposes of compliance with the procedural time-limits, provided that the signed original of the procedural document, accompanied by the annexes and copies referred to in paragraph 2, is lodged at the Registry no later than 10 days thereafter’. As the cross-appeals were lodged at the Court Registry before 1 November 2012, the Commission’s objection of inadmissibility is untenable in fact and in law and must therefore be rejected.

12. The Commission also puts forward a series of specific complaints alleging inadmissibility aimed at most of the pleas and arguments raised in support of both the main appeal and the cross-appeals. Those complaints will be examined separately, when I analyse those various pleas and arguments.

B – Substance

13. MasterCard Inc., MasterCard International Inc. and MasterCard Europe put forward three pleas in law in support of their appeal. The first two pleas allege an error of law and/or failure to state reasons vitiating the parts of the judgment under appeal in which the General Court examined, respectively, the objective necessity of the restriction of competition and the nature of MasterCard as an association of undertakings. By their third plea, they claim that the General Court was wrong to reject as inadmissible a number of annexes to the application at first instance.

14. In support of its cross-appeal, RBS puts forward a single plea in law, alleging an error of law by the General Court in its assessment of a restrictive effect on competition. The joint cross-appeal lodged by LTSB and BOS (together ‘LBG’) relies on two pleas in law. The first, like the first plea raised in support of RBS’s cross-appeal, alleges an error of law affecting the General Court’s assessment of the effects of the MIF on competition. By its second plea, LBG claims that the General Court made an error of law in its analysis pursuant to Article 81(3) EC. Both RBS and LBG support and develop the first and second pleas in the main appeal.

15. With the exception of the third plea in the main appeal, the various pleas and arguments put forward in support of the appeals, both the main appeal and the cross-appeals, may be grouped around the following themes: the characterisation of MasterCard as an association of undertakings; the existence of effects restrictive of competition; the necessity of the restriction; and the application of Article 81(3) EC.

16. Before addressing each of those themes, it is appropriate to examine the third plea in the main appeal, in so far as, in claiming that the General Court unlawfully rejected certain documents annexed to the application, it seeks, in essence, to demonstrate that the General Court based its assessment on an incomplete evidential framework.

1. Third plea in the main appeal, alleging that the General Court wrongly rejected as inadmissible a number of annexes to the application at first instance

17. The main appellants claim that the General Court erred in law in declaring inadmissible certain annexes which they produced before it. First, they dispute the existence of a legal basis that would justify the approach taken in the judgment under appeal. The provisions to which the General Court refers in that judgment require merely that the applicant state in its application the subject-matter of the dispute and also a summary of the pleas in law on which the application is based. On the other hand, there is no legal basis that would prevent an applicant from supporting its pleas by including arguments in annexes, provided that those arguments are clearly summarised in the application. The over-restrictive approach taken by the General Court thus constitutes a breach of both the principle of effective judicial protection, guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and also by Article 6(1) ECHR, any limitation of which must be in accordance with the law, and also the principle of proportionality. Second, the appellants dispute the way in which the General Court actually dealt with certain annexes.

18. As regards, in the first place, the complaint concerning the legal basis for the treatment of the annexes, it should be observed that, at paragraphs 68 and 69 of the judgment under appeal, the General Court relied on Article 21 of the Statute of the Court of Justice and on Article 44(1)(c) of the Rules of Procedure of the General Court. Under those provisions, every application is to state the subject-matter of the proceedings and a summary of the pleas in law on which the application is based.

19. With respect to those provisions, the Court has already had occasion to make clear that they are to be interpreted as meaning that, in order for an action to be admissible, it is necessary that the basic matters of law and fact relied on be indicated, at least in summary form, coherently and intelligibly in the application itself and that, while the body of the application may be supported and supplemented on specific points by references to extracts from documents annexed thereto, a general reference to other documents, even those annexed to the application, cannot make up for the absence of the essential arguments in law which, in accordance with the provisions referred to in the preceding point, must appear in the application. In the same context, the Court has held that similar requirements are called for where a submission is made in support of a plea in law. ( 18 ) That interpretation has its basis in the purely probative and instrumental purpose of the annexes, which means that, in so far as a document annexed to the application contains elements of law on which certain pleas expressed in the application are based, those elements must be set out in the actual body of the application to which that document is annexed or, at the very least, be sufficiently identified in the application. In the light of that purpose of the annexes, it is not for the General Court to seek and identify in the annexes the pleas on which it may consider the action to be based. ( 19 )

20. Such an interpretation of Article 21 of the Statute of the Court of Justice and Article 44(1)(c) of the Rules of Procedure of the General Court is not in any way contrary to the principle of effective judicial protection. According to the case-law of the European Court of Human Rights on the interpretation of Article 6(1) ECHR, to which reference must be made in accordance with Article 52(3) of the Charter, the right to a court is not absolute. The exercise of that right is subject to limitations, in particular as to the conditions for the admissibility of an action ( 20 ) and therefore, a fortiori, of a plea, an argument or an annex to the parties’ written pleadings. However, those limitations are permissible, according to the European Court of Human Rights, only where they pursue a legitimate aim and are proportionate to that aim and do not restrict the individual’s access to a court in such a way that the very essence of the right is impaired. ( 21 ) In addition, while the persons concerned should expect those limitations to be applied, their application must not prevent litigants from availing themselves of an available legal remedy. ( 22 )

21. As regards the aim pursued by Article 21 of the Statute of the Court of Justice and Article 44(1)(c) of the Rules of Procedure of the General Court, namely to ensure legal certainty and the proper administration of justice, the appellants themselves acknowledge that it is legitimate. Furthermore, an approach that requires that applicants state in the application, at least in summary form, the elements of fact and of law on which the pleas and arguments put forward are based does not seem disproportionate to those aims, nor is it capable of impairing the essence of the right to a court.

22. It follows from the foregoing that, in basing the approach which it took in the judgment under appeal, in particular at paragraphs 68 and 69 of that judgment, to the annexes to the parties’ pleadings on the provisions referred to at point 20 above, as interpreted by this Court, the General Court did not err in law.

23. It is appropriate, in the second place, to analyse the General Court’s specific application of those provisions with respect to the annexes the treatment of which is disputed by the main appellants. Their arguments refer specifically to the analysis set out at paragraphs 183 to 190 of the judgment under appeal and, in particular, to the treatment of Annexes A.13, A.14 and A.15, and also to the analysis set out at paragraphs 275 to 282 of the judgment under appeal and, in particular, to the treatment of Annex A.20. The main appellants claim that they summarised the pleas in law in the application and that both the General Court and the Commission understood the arguments which they put forward. In addition, the elements set out in the annexes are elements of fact. Where the annexes contain only factual elements, those elements do not need to be set out in the body of the application. The General Court ought therefore to have concluded that the application was sufficiently precise with respect to the pleas and arguments on which the application was based and that the annexes were therefore admissible.

24. As regards, first of all, the treatment of annexes A.13, A.14 and A.15, it is clear on reading the application submitted at first instance by the main appellants that the General Court was correct to take the view that they had stated their complaint – relating to the examination of the economic evidence adduced during the administrative procedure – in such succinct terms that it was impossible to identify in the body of the application any argument capable of supporting it. The arguments in support of the complaint are to be found, and must be sought, in full in those annexes. That is clear, moreover, from paragraphs 185 and 186 of the judgment under appeal. The same analysis applies to the treatment of Annex A.20, referred to at paragraph 280 of the judgment under appeal. As regards that annex, it must be observed that the appellants confined themselves in their application before the General Court to making a general reference to that annex in a footnote, without further detail. In those circumstances, I consider that the General Court did not err in its treatment of those annexes.

25. As for the argument that where the annexes contain only factual elements those elements need not be stated in the body of the application, it should be borne in mind that, according to the case-law referred to at point 19, the essential elements of fact and of law on which the application, or a plea or even an argument, is based must not only be set out in summary form in the application, but must be clear, in a coherent and comprehensible fashion, from the body of the application, which, as may be seen from point 24 above, is not the case here.

26. In the light of all the foregoing, I consider that the plea alleging errors of law in relation to the admissibility of certain annexes must be rejected.

2. MasterCard as an ‘association of undertakings’ (second plea in the main appeal)

a) The judgment under appeal

27. The General Court addressed the question of the characterisation of MasterCard and the decisions setting the MIF in the light of Article 81(1) EC at paragraphs 241 to 260 of the judgment under appeal. It first of all defined the scope of that question as being whether, ‘in spite of the changes made by the IPO, the MasterCard payment organisation [had continued] to be an institutionalised form of coordination of the banks’ conduct’ (paragraph 244) and the MIF to be the expression of that coordination. ( 23 ) Next, it observed, at paragraphs 245 to 247, that, since the IPO, ‘the banks [had] continued, collectively, to exercise decision-making powers in respect of the essential aspects of the operation of the MasterCard payment organisation … both at a national and at a European level’ and that the retention of such decision-making powers ‘mean[t] that the conclusions to be drawn from the IPO [were] very much to be set in perspective’. At paragraphs 250 to 258, moreover, the General Court held that, owing to the existence of a commonality of interests between MasterCard and the banks in setting the MIF at a high level, the Commission had been entitled to take the view that ‘the MIF essentially reflected the banks’ interests even though they no longer controlled MasterCard after the IPO’. The General Court therefore concluded, in the light of the same elements of continuity on which the Commission had relied, that the Commission had been entitled to characterise MasterCard as an association of undertakings and the decisions taken by the bodies of MasterCard setting the MIF as decisions by an association of undertakings.

b) The appeal

28. The main appellants, supported by RBS, LBG, HSBC and MBNA, claim that the General Court’s finding that MasterCard is an association of undertakings when it sets the MIF is vitiated by an error of law and/or a failure to state reasons. They maintain that the first ground relied on in order to support that finding, namely the fact that, after the IPO, the banks retained a residual decision-making power within the MasterCard payment organisation, is irrelevant, since that power is exercised in relation to matters other than the setting of the MIF and since the General Court itself acknowledged, at paragraph 245 of the judgment under appeal, that decisions relating to those fees ‘[were] taken by the bodies of the MasterCard payment organisation and that the banks [did] not take part in that decision-making process’. Furthermore, they claim that the second ground on which the General Court relied, namely the alleged commonality of interests between the MasterCard payment organisation and the banks in setting the MIF, is neither relevant, in the light of the Court’s case-law, nor sufficient to demonstrate the existence of an association of undertakings, which cannot be inferred, in particular, from the mere fact that a company may be induced to take account of its customers’ interests when adopting its business decisions. In addition, the General Court’s reasoning amounts to maintaining that the acquiring banks also have an interest in the MIF being set at a high level, in spite of the fact that that entails an increase in their costs and therefore a potential reduction in their profits.

c) Analysis

29. The issue of the characterisation of MasterCard and its decisions in the light of Article 81(1) EC after the flotation of MasterCard Inc. has, since the administrative procedure, been the subject of a debate part between rupture and continuity. While the appellants – which did not dispute the characterisation of MasterCard as an association of undertakings during the period up to 25 May 2006 – emphasised the significance of the changes in the structure and governance of the organisation after that date, both the Commission and the General Court found that its mode of operation was substantially the same before and after the IPO and concluded that the IPO had not altered either the pre‑existing balance between the mutual interests of the various players in the system or the economic reality of the MIF.

30. Although, in such a context, the complaints being analysed reveal a number of elements of criticism of the assessments of fact carried out by the General Court, they none the less, contrary to the Commission’s contention, raise a point of law, concerning the interpretation and application in the present case of the concept of an ‘association of undertakings’ within the meaning of Article 81(1) EC.

i) The alleged failure to have regard to the Court’s case-law on the concept of ‘association of undertakings’

31. The main appellants take issue, first of all, with the General Court for having failed to follow this Court’s case-law on that concept. They maintain that, according to that case-law, an entity cannot be characterised as an association of undertakings within the meaning of Article 81(1) EC unless it is composed of a majority of representatives of the undertakings concerned and unless, in the light of the applicable national legislation, it is free to take its decisions in the exclusive interest of those undertakings.

32. Let me say at the outset that such an interpretation strikes me as being excessively restrictive. While it is actually based on two criteria, connected with the composition and legal framework of the activities of the entity in question, which may be identified in the Court’s case-law, it none the less argues in favour of a strict application of those criteria which is difficult to reconcile with both the purpose of Article 81 EC, which is to cover every form of cooperation between undertakings that is contrary to the objectives pursued by that article, and the broad scope that the case-law affords to the concept of association of undertakings.

33. As the General Court correctly observed in the judgment under appeal, ( 24 ) it follows, generally, from the case-law that the concepts of ‘agreement’, ‘concerted practice’ and ‘decision by an association of undertakings’ in Article 81(1) EC are intended to catch all collusion between undertakings which tends to produce the effects prohibited by that provision, irrespective of the form which it takes. ( 25 ) Accordingly, undertakings cannot avoid the prohibition laid down in that provision by the mere fact that they coordinate their conduct on the market through a body or a joint structure or that they entrust such coordination to an independent body. ( 26 ) As regards, more specifically, the concept of association of undertakings, it has been given a broad interpretation as designating any body, even one without legal personality or a non‑profit‑making body, ( 27 ) and irrespective both of its legal classification under national law ( 28 ) and of the fact that its members are natural or legal persons or are themselves associations of undertakings. ( 29 ) The concept of decision of an association of undertakings has also been given a broad interpretation. It follows from the case-law that that concept covers any measure, even if it is not binding, ( 30 ) which, regardless of what its precise legal status may be, constitutes the faithful reflection of the association’s resolve to coordinate the conduct of its members. ( 31 )

34. Contrary to the main appellants’ contention, it cannot be inferred from the case-law which they cite, and in particular from Wouters, ( 32 ) that the two criteria referred to below are intended to apply irrespective of the body in question. That case, like the other cases to which the main appellants refer, ( 33 ) did not concern private bodies of a purely commercial nature, like MasterCard, but public bodies with a principally professional mission, often having regulatory powers conferred by law and pursuing, in addition to the collective interests of their members, aims of general interest. ( 34 ) In all those cases the essential question to be assessed was whether, in the light of the public-law regime to which those bodies were subjected, they acted independently on the market, so that the conduct which they pursued and the measures which they adopted, or in the adoption of which they participated, could be regarded as collusive acts for the purposes of Article 81(1) EC. In the context of that assessment, the Court has sometimes been led, as was the case in Wouters and, more recently, in Ordem dos Técnicos Oficiais de Contas, ( 35 ) to draw a distinction between the activities in which the entity in question acted as a body invested with public powers and/or pursued aims in the public interest and those in which it behaved as an association acting in the exclusive interest of its members.

35. It is in that context of a mixture between public and private interests and powers that the Court developed and applied the two criteria on which the main appellants rely. It is in the same context that the Court followed the functional approach on which they also rely, according to which an entity may constitute an association of undertakings within the meaning of Article 81(1) EC where it carries out certain tasks and not others, so that, for the purposes of its correct classification under the competition rules, all that matters is the nature of the functions which it carries out when adopting the measure which is assumed to infringe those rules.

36. It is not disputed that MasterCard is a private-law body that pursues a commercial aim. It is not subject to a public-law regime, nor is it entrusted with a public service, and the decisions adopted by its bodies are solely a function of private interests. In such circumstances, in the light of the considerations developed at points 34 and 35 above, recourse to those criteria, which were developed for the purpose of assessing contexts substantially different from that of the present case, was not mandatory and the General Court could, without disregarding the concept of association of undertakings as thus interpreted in this Court’s case-law, take other elements of assessment into consideration.

ii) The alleged irrelevance of the elements on which the General Court relied

37. The main appellants submit, next, that the elements on which the General Court relied, namely, first, the fact that the banks retained a residual decision-making power within the MasterCard payment organisation and, second, the alleged commonality of interests between that organisation and the banks in the setting of the MIF, are of no relevance for the purpose of assessing whether there was an association of undertakings within the meaning of Article 81(1) EC and, in any event, are insufficient to characterise such an association.

38. As regards the first of those elements, the main appellants claim that the fact that the banks retained decision-making powers after the IPO is irrelevant, in so far as those powers do not relate to the setting of the MIF. In relying on that fact in order to conclude that MasterCard acted as an association of undertakings when it set the MIF, the General Court disregarded the functional approach followed by the Court of Justice in Wouters.

39. In that regard, without going into the substance of the General Court’s assessment of the importance recognised to those decision‑making powers, I observe at the outset that that assessment differs from that made by the main appellants, which tend to present those powers as substantially negligible. At paragraph 247 of the judgment under appeal, the General Court emphasised that the European Board had retained power to decide on ‘key issues’ relating to different aspects of the operation of the organisation at regional level.

40. That having been made clear, I refer to the considerations set out at points 34 and 35 above, and also to the assertion made at point 36 above, from which it follows that the General Court was not required in the circumstances of the present case to follow that functional approach and was therefore able to take into account, as an element of assessment, the decision-making powers retained by the banks after the IPO, without being required to ascertain, as the main appellants claim, whether such powers could have an impact on the setting of the MIF.

41. As regards the second of the elements referred to above, namely the existence of a commonality of interests between MasterCard and the banks in setting the MIF, the main appellants essentially maintain that to infer from a mere coincidence of interests between two or more economic operators the existence of an association of undertakings, would result in Article 81 EC being applied in the absence of any evidence of collusion, which assumes a concurrence of wills.

42. To my mind, that argument must be rejected. In the present case, the General Court found the existence of an institutionalised framework to which the banks belong and within which they cooperate among themselves and with MasterCard in order to achieve a joint project which entails limiting their commercial autonomy and defines the lines of their reciprocal action. It is therefore a very different scenario from that of mere parallel conduct, to which the main appellants refer, in which the interest of the undertakings concerned in not competing is pursued by each of them independently, by aligning its conduct with that of its competitors. The present case is also to be distinguished from BAI and Commission v Bayer, ( 36 ) to which LBG refers. While it is true that in that case the General Court concluded that, having failed to establish a concurrence of wills between Bayer and its wholesalers with a view to reducing parallel trade, the Commission had been wrong to find the existence of an agreement under Article 81 EC, that conclusion was based on the finding that the respective intentions of the parties had been misinterpreted and that neither Bayer’s intention to impose an export ban, nor even the tacit acquiescence on the part of the wholesalers to the imposition of such a ban, had been demonstrated. ( 37 )

43. It follows from the analysis carried out at points 32 to 35 above that a body comes within the concept of an association of undertakings within the meaning of that provision when it constitutes the framework in which, or the instrument whereby, the undertakings coordinate their conduct on the market, provided that that coordination or the results which it achieves are not imposed by the public authorities. It also follows from that analysis that, in view of the function fulfilled by the concepts of ‘association of undertakings’ and ‘decision of an association of undertakings’ within the structure of Article 81(1) EC, the question whether they apply in a specific case must be assessed in the light of all the relevant elements of the particular case, which must disclose the intention of the undertakings in question to coordinate their conduct on the market through a collective structure or a joint body.

44. The relevance of the two elements referred to at point 37 above cannot be disputed in the circumstances of the present case, where the question of the classification of MasterCard as an association of undertakings within the meaning of Article 81(1) EC essentially entails an assessment of the impact of the IPO on its operating method, on its relationship with the affiliated banks and also, more generally, on the equilibrium within it. In that regard, I observe that the arguments which the main appellants put forward at first instance in order to challenge such a classification were based essentially on the assertion that no coordination could be imputed to the banks after 25 May 2006 with respect to the MIF, which were now set by MasterCard and applied to the affiliated banks in the context of a supplier-customer relationship.

45. As to whether those elements were sufficient in the present case to confirm the Commission’s classification of MasterCard as an association of undertakings, I consider, on the basis of all the foregoing considerations, that it cannot be precluded outright that a body may be classified as an association of undertakings even where, as in MasterCard’s case, the decisions which it adopts are not taken by a majority of the representatives of the undertakings in question or in their exclusive interest, if it follows from a global assessment of the circumstances of the case that those undertakings intend or at least agree to coordinate their conduct on the market by means of those decisions and that their collective interests coincide with those taken into account when those decisions are adopted. A fortiori, such a classification cannot be precluded outright in a context such as that of the present case, where the undertakings in question pursued, over several years, the same objective of joint regulation of the market within the framework of the same organisation, albeit under different forms.

46. On the basis of its assessment of the facts and circumstances of the case, the General Court concluded that the decisions of the Global Board of MasterCard Inc. setting the MIF continued to reflect the collective interests of the banks affiliated to the system and that those banks continued knowingly to coordinate their policy on cross‑border interchange fees by means of those decisions, in spite of the fact that they no longer took part in the decision-making process leading to the adoption of those fees. That assessment, subject to any distortion of the facts and/or the evidence, ( 38 ) is in itself not amenable to review by the Court.

47. In that regard, it is necessary to reject the criticism which the main appellants, supported by HSBC, direct against the General Court for having confirmed the Commission’s assertion that the acquiring banks also had an interest in the setting of high MIF. In the first place, that criticism seeks to challenge the General Court’s assessment of the facts and the evidence without claiming any distortion of either the facts or the evidence or advancing any proof going beyond mere assertions. ( 39 ) In the second place, contrary to the main appellants’ assertion, the General Court did not merely state, on that point, that the acquiring banks could pass the MIF on to their customers, but it made clear that a system of multilateral fallback setting of interchange fees such as the MIF provided the acquiring banks with a guarantee that an increase in those fees would not have had an impact on their competitive position. ( 40 ) Last, as for the General Court’s reference to the rule of the MasterCard system that banks wishing to acquire transactions were required also to have a card-issuing business, the main appellants cannot claim that it is irrelevant merely by relying on the fact that that rule was applied until 31 December 2004 and was no longer in force on the date of the IPO. It is clear from paragraph 254 of the judgment under appeal that the General Court accepted the Commission’s explanation that, owing to the abovementioned rule, the system had developed in such a way that virtually all banks engaged in the acquiring business were also card issuers and benefited to that extent from the MIF, and remained the same after that rule was abolished. It is also clear from that paragraph of the judgment under appeal that the applicants did not put forward before the General Court any evidence to challenge the merits of that explanation.

48. In conclusion, examination of the above complaints has not enabled it to be established that, in confirming the Commission’s classification of MasterCard as an association of undertakings, the General Court failed to have regard to the concept of association of undertakings within the meaning of Article 81(1) EC as interpreted by the Courts of the European Union.

3. The existence of effects restrictive of competition (the single plea in RBS’s cross-appeal and the first plea in LBG’s cross-appeal)

a) The decision at issue and the judgment under appeal

49. In the interest of clarity, it is appropriate to set out briefly the various passages of the analysis in the decision at issue relating to the effects of the MIF on competition. In that decision, the Commission concluded that, in so far as they influenced the amount of the interchange fees charged by the issuing banks to the acquiring banks, ( 41 ) which passed the costs of the fees charged on to the merchants, the MIF produced restrictive effects on price competition on the acquiring market, to the detriment of merchants and their customers. ( 42 ) In order to arrive at that conclusion, it found, in the first place, relying on two quantitative analyses, that the MIF constituted a minimum level for fees charged by the acquiring banks to merchants irrespective of their size. ( 43 ) In the second place, it inferred from an investigation among merchants carried out by the Commission itself in 2004 (‘the 2004 market study’) that the MIF prevented the MSC from being reduced below a certain level. In the third place, after rejecting the arguments whereby MasterCard challenged the argument that the MIF had a restrictive effect on competition in the acquiring market, ( 44 ) the Commission examined the effects of the MIF on the issuing market, and concluded that the banks operating on that market tended to favour the cards generating the highest interchange revenues and that that strategy was capable of further increasing the cost of accepting cards on the acquiring market. ( 45 ) In the fourth place, the Commission observed that intersystem competition (between the different card payment networks, essentially between Visa and MasterCard), not only did not prevent MasterCard from maintaining interchange fees at a high level but exercised an upward pressure on those fees, increasing the distortions of competition on the acquiring market. ( 46 ) In the fifth place, the Commission found that the MIF were not subject to any constraint either on the part of the acquiring banks or on the part of merchants. ( 47 ) In the latter regard, the Commission took into consideration, among other factors, the rule of the MasterCard network whereby merchants (and acquiring banks) were required to honour all cards, namely all the products offered by MasterCard on the issuing market, no matter what the issuing bank (the Honour-All-Cards Rule; ‘the HACR’). Last, the Commission considered that the members of MasterCard exercised collectively market power vis-à-vis merchants and their customers and that the MIF allowed them to exploit that power.

50. The General Court examined the question of the effects of the MIF on competition at paragraphs 123 to 193 of the judgment under appeal. In the first place, it addressed and rejected the complaint alleging failure to examine how competition would function in the absence of the MIF. In that context, it rejected, first, the criticisms relating to the fact that the Commission took into account, in its counterfactual analysis, a rule prohibiting ex post pricing ( 48 ) as a fallback rule replacing the MIF (paragraph 132 of the judgment under appeal) and, second, those relating to the reference, made by the Commission in the context of that analysis, to the fact that bilateral negotiations would be held between issuing banks and acquiring banks, leading, ultimately, to the disappearance of interchange fees (paragraph 133). The General Court then rejected the arguments criticising the Commission for having failed to establish that the elimination of the MIF would raise the level of competition between acquirers (paragraphs 135 and 136) and, in particular, the argument alleging an assimilation of the MIF to a common entrance cost, neutral from the aspect of competition (paragraph 143). In the second place, at paragraphs 168 to 182 of the judgment under appeal, the General Court addressed and rejected a number of complaints relating to the examination of the product market, confirming the market analysis in the decision at issue. As regards, in particular, the existence of an autonomous acquiring market, the General Court emphasised that, in spite of a certain complementarity between the ‘issuing’ and ‘acquiring’ sides of the market, the services provided to cardholders and those provided to merchants could be distinguished and, furthermore, cardholders and merchants exerted separate competitive pressure on issuing and acquiring banks respectively (paragraphs 176 and 177). In the same context, the General Court considered that the criticisms relating to the failure to take the two-sided nature of the market into consideration highlighted the economic advantages flowing from the MIF and were therefore irrelevant in a plea alleging infringement of Article 81(1) EC. Last, the General Court rejected both the complaint, put forward by the main appellants, relating to the examination of the economic evidence submitted during the administrative procedure (see point 139 et seq. above) and a complaint alleging failure to state reasons for the Commission’s change of approach by comparison with the Visa decision of 24 July 2002. ( 49 )

b) The single plea in RBS’s cross-appeal

i) The complaint alleging an error of law affecting the counterfactual analysis carried out by the General Court

51. By its sole plea in law, RBS, supported by the main appellants, first of all takes issue with the General Court for having failed to ascertain whether the hypothesis developed by the Commission in its counterfactual analysis, based on the application of a rule prohibiting the issuing banks from ex post pricing, would have been likely to apply in the absence of the MIF. In confining itself to confirming the economic viability of such a rule, the General Court confused the analysis of the effects of the MIF on competition and the analysis of the objective necessity for the restriction which they would produce.

52. According to a consistent line of decisions, in order to assess whether an agreement (or a decision by an association of undertakings) must be considered to be prohibited owing to its effects on the market, it is necessary to examine competition within the actual context in which it would occur in the absence of the agreement (or the decision) in dispute. ( 50 ) The method of analysis indicated by this Court therefore entails a comparison between the competitive structure caused by the alleged restriction and that which would have prevailed in its absence.

53. As the second factor in that comparison is the result of an assessment based on hypotheses, it cannot be required that proof be adduced that the scenario used in the context of that assessment will inevitably arise in the absence of the presumed restriction. ( 51 ) That scenario must however be sufficiently realistic and plausible, and therefore not merely theoretically possible, in the light of all the relevant factors such as, in particular, the nature of the products or services concerned, the position of the parties to the agreement on the relevant market, ( 52 ) the structure of the market and also the economic, legal and technical context governing its functioning, ( 53 ) the conditions of competition, both actual and potential, ( 54 ) the existence of barriers to entry, ( 55 ) the degree of market saturation and consumer loyalty to existing brands ( 56 ) and the existence or exercise of intellectual property rights.

54. In the present case, the Commission examined the competitive process that would have developed on the acquiring market in the absence of the MIF at recitals 458 to 460 to the decision at issue and concluded that, in the absence of the MIF and with a prohibition on ex post pricing, the prices charged to merchants by acquirers ‘would only be set taking into account the acquirer’s individual marginal cost and his mark up’. According to the Commission, ‘[t]he uncertainty of each individual acquirer about the level of interchange fees which competitors bilaterally agree to pay to issuers would exercise a constraint on acquirers’, so that ‘[i]n the long run this process can be expected to lead to the establishment of inter-bank claims and debts at the face value of the payment, that is without deducting any interchange fees’. At paragraph 133 of the judgment under appeal, the General Court approved that analysis. Thus, contrary to the assertion of RBS and the main appellants, in particular at the hearing, the decision at issue does not lack a counterfactual analysis and the judgment of the General Court did not err in law in not taking issue with the Commission for such an alleged omission.

55. RBS disputes the assertion at paragraph 132 of the judgment under appeal that ‘the fact that the premiss of a MasterCard system operating without a MIF – solely on the basis of a rule prohibiting ex post pricing – appears to be economically viable is sufficient to justify its being taken into consideration in the context of the analysis of the effects of the MIF on competition’.

56. In order to comprehend the meaning and the scope of that paragraph, it is appropriate to observe that in the judgment under appeal the General Court addressed the complaints alleging errors of assessment in the analysis of the effects of the MIF on competition after it had addressed the complaint alleging an incorrect examination of the objective necessity of the MIF. The General Court considered that, in view of the criticisms aimed at the Commission’s assessment pursuant to Article 81(1) EC, it was preferable to ascertain the economic viability of a MasterCard system operating without the MIF before assessing, as required by the case-law cited at point 52 above, how competition on the acquiring market would be exercised in the context of such a system.

57. Such a process led the General Court to introduce into the framework of the examination of the effects of the MIF on competition the conclusions which it had reached following its examination of their objective necessity. Thus, having concluded, following that examination, that the Commission had been entitled to find that a mechanism of regulation by default containing MIF of a positive level was not objectively necessary for the viability of the MasterCard system, and that that system could have operated on the basis of a less restrictive alternative, namely a rule prohibiting ex post pricing, it considered, at paragraph 132, that it was permissible for the Commission to take as a starting point for its analysis of competition in the absence of the MIF a scenario characterised by such a rule. Contrary to RBS’s claim at the hearing, such a counterfactual scenario was not developed by the General Court in order to fill a gap in the decision at issue, but already appeared in that decision. ( 57 )

58. The General Court therefore did not confuse the criteria of the analysis of the effects of a restriction on competition and those applicable to the examination of the objective necessity of an ancillary restriction, nor did it disregard the principles laid down in the case-law referred to at point 52 above, substituting for the ‘actual framework’ in which competition in the absence of the presumed restriction must be assessed an ‘economically viable’ framework. At paragraph 132 of the judgment under appeal, the General Court, in essence, merely recalled, on the basis of the results of its assessment of the objective necessity of the MIF, the conditions in which, in the absence of the presumed restriction, the MasterCard system would have been able to continue to operate.

59. As regards the assertion which the main appellants reiterate in their response to RBS’s cross-appeal, namely that the introduction of a rule prohibiting fallback pricing would not be realistic, that such a rule would not be the result of market forces and that it would never have been adopted by MasterCard, unless it had been made compulsory by regulatory intervention, I refer to the considerations developed at points 101 to 106 below in the context of the examination of the objective necessity of the MIF. At this stage, I shall merely observe that, at first instance, the main appellants insisted at length, first, that a fallback mechanism to regulate transactions is an essential requirement of any four-party system characterised by the HACR and, second, that there is no market process between issuing and acquiring banks. In those circumstances, I wonder whether such a fallback mechanism is not necessarily the result of intervention alien to market forces, whether a decision taken within a payment system ( 58 ) or intervention by the competition authority. ( 59 )

60. Thus, the situation with which we are faced here is very different from that in O2 (Germany) v Commission, ( 60 ) to which the main appellants also refer in their response to RBS’s cross-appeal. In that judgment, the General Court took issue with the Commission for not having properly reconstructed the competitive structure that would have applied in the absence of the agreement at issue, in so far as it had, in particular, taken for granted O2’s presence on the 3G mobile telephone market, when such a fact was not only unsubstantiated but, moreover, was contradicted by the analysis which the Commission had carried out under Article 81(3) EC. In the present case, on the other hand, the Commission is, in essence, criticised for having examined the competitive situation on the acquiring market in the absence of the MIF without taking into account the fallback mechanism that MasterCard would in all likelihood have decided to adopt in order to replace the MIF.

61. For the reasons set out above, I consider that RBS’s complaint alleging an error of law affecting the General Court’s counterfactual analysis should be rejected.

ii) The complaint alleging an insufficient analysis of the effects of the MIF on competition

62. Next, RBS takes issue with the Commission and the General Court for not having based their analysis of the effects of the MIF on competition on specific and concrete evidence but having confined themselves to general considerations and mere assumptions, taking an approach which is appropriate where a restriction by object is presumed but not, as in the present case, a restriction by effect.

63. That complaint contains little detail and in essence merely refers to the general nature of the General Court’s assertions and is based on a selective reading of the judgment under appeal. Contrary to the impression which RBS gives in referring to the wording used in the second sentence of paragraph 143 of the judgment under appeal, ( 61 ) the General Court did not merely infer the restrictive effects of the MIF from the sole finding that they set a floor for the MSC. On the contrary, it, first, recalled, at paragraph 140 of the judgment under appeal, the wording of Article 81(1)(a) EC, emphasising that its objective ‘is to prohibit undertakings from distorting the normal formation of prices on the market’. Second, in rejecting the complaint alleging that the MIF acted as a common entrance cost, the General Court explained that ‘the MIF limits the pressure which merchants can exert on acquiring banks when negotiating the MSC by reducing the possibility of prices dropping below a certain threshold’ (third sentence of paragraph 143). Third, the General Court addressed and rejected the various complaints and arguments submitted by the main appellants and also by the interveners against the analysis of the restrictive effects in the decision at issue. In that context, it examined and approved the Commission’s assessment relating, in particular, to whether the Commission had demonstrated to the requisite legal standard that the MIF set a floor price for the MSC (paragraphs 159 to 165) and that the constraint exercised by merchants over the MIF was insufficient (paragraphs 157 and 158), whether the Commission had correctly defined the product market (paragraphs 169 to 173) and taken as an autonomous and relevant market the acquiring market (paragraphs 175 to 178) and whether it had been correct to exclude from its analysis the competitive pressure brought to bear on the level of the MIF by other payment methods (paragraph 180) and also the two-sided nature of the market (paragraphs 181 and 182). Last, the General Court examined and approved both the reliability and the probative value of the documents on which the Commission had relied, namely, first, the statements of a petroleum company, a supermarket chain based in the United Kingdom, an airline and a furniture shop (paragraphs 146 and 147) and, second, the 2004 market study (paragraphs 148 to 158).

64. In the light of the foregoing, the General Court cannot to my mind be criticised for having carried out, as RBS claims, an insufficient analysis in regard to a restriction by effect. In any event, while it is true that in the decision at issue the Commission did not adopt a definitive position as to a possible anti-competitive object of the MIF and that, accordingly, it was required to assess their effects on the market, the fact none the less remains that, in a situation involving collusion which directly affects the pricing mechanism, its ability to distort the normal development of prices on the market may in fact be easier to demonstrate. In that regard, I observe that, in the judgment concerning the Austrian banks, ( 62 ) the General Court, without being contradicted by the Court of Justice on appeal, ( 63 ) asserted that, in order to establish whether a pricing agreement implemented by the participating undertakings has had an actual impact on the market, ‘it is sufficient that the agreed prices have served as a basis for determining individual transaction pieces, thereby limiting customers’ room for negotiation’. ( 64 ) Admittedly, the collusive arrangement at issue in that case had been considered to be restrictive by object and the Commission had taken its effects on the market into account only when assessing the gravity of the infringement for the purpose of setting the fine. However, it cannot be considered that a lower degree of rigour in proving the effects of a collusive arrangement on the market should be required for the purpose of determining the level of the fine than for the purpose of determining whether the arrangement in question falls under Article 81(1) EC. ( 65 )

iii) The complaint alleging a contradiction vitiating the grounds of the judgment under appeal

65. RBS claims, last, that there is a contradiction concerning the ability of merchants to influence the pricing policy of MasterCard and its members, which is asserted at paragraph 143 of the judgment under appeal, and the findings set out at paragraphs 150, 157 and 158 of that judgment.

66. In my view, this complaint must also be rejected. The ‘constraint’ discussed at paragraphs 150, 157 and 158 of the judgment under appeal is the constraint that merchants could bring to bear on the level of the MIF by refusing or discouraging the use of MasterCard cards, a constraint which, on the basis of the 2004 market study, the Commission and the General Court deemed insufficient, owing to the negative effects that such conduct on the merchants’ part could have had on their customers. ( 66 ) At paragraph 143 of the judgment under appeal, on the other hand, the General Court refers to the ‘pressure’ that merchants can exert on acquiring banks when negotiating the MSC: that pressure is limited by the MIF – which constitute the threshold below which the MSC are in principle unlikely to drop – but would be increased in an acquiring market operating in their absence. There is therefore clearly no contradiction between the paragraphs of the judgment under appeal to which RBS refers, since they relate to different situations.

iv) Conclusions on the single plea in RBS’s cross-appeal

67. On the basis of all the foregoing considerations, I consider that the single plea in RBS’s cross-appeal and, accordingly, the cross-appeal in itself, must be rejected as unfounded.

c) The first plea in LBG’s cross-appeal

68. In the context of its first plea in law, LBG puts forward, in essence, three criticisms of the judgment under appeal.

69. LBG takes issue with the General Court, in the first place, for not having provided sufficient reasons for its finding that the MIF distort competition on the acquiring market although they constitute a common entrance cost. In that regard, it is sufficient to observe that the General Court rejected the complaint alleging that the MIF acted as a common entrance cost at paragraph 143 of the judgment under appeal, where it explained that, by comparison with an acquiring market operating in the absence of such fees, ‘the MIF limits the pressure which merchants can exert on acquiring banks when negotiating the MSC by reducing the possibility of prices dropping below a certain threshold’. That explanation is accompanied by a reference to the finding made by the Commission, and approved by the General Court, concerning the viability of a MasterCard system operating without an MIF. Taken as a whole, such reasoning, which relies on an inversely proportionate ratio between the merchants’ scope for negotiating the MSC and the level of the MIF, and also on the assertion that the MIF is artificial and not objectively necessary, is to my mind sufficient to enable the General Court’s reasoning to be followed.

70. In the second place, LBG takes issue with the General Court, in essence, for having found the existence of pricing collusion on the issuing market but having examined the effects of that collusion on the downstream acquiring market. It confines itself, in that regard, to referring to the arguments which it developed at paragraphs 48 to 52 of its statement in intervention before the General Court, to which the latter did not respond.

71. In the Commission’s submission, this complaint is inadmissible since, in its capacity as an intervener, LBG was not allowed to rely on those arguments, which in reality raised a new plea in law by comparison with those relied on in support of the application, alleging an error in the definition of the relevant market. In that regard, I observe that, at the abovementioned paragraphs of LBG’s statement in intervention at first instance, LBG sought, in essence, to take issue with the Commission, first, for having chosen, in its counterfactual analysis, a hypothesis – namely, a MasterCard system operating without MIF but with a rule prohibiting ex post pricing – having the same impact on competition between acquiring banks as the MIF (paragraphs 49 and 50), second, for having relied on the 2004 market study, the probative value of which is called into question (paragraph 51) and, third, for having adopted an ‘unusual’ approach by examining the restrictive effects of the MIF on the acquiring market and not on the issuing market, where the collusive arrangement was put in place (paragraphs 52 to 54). In fact, the General Court responded to the first two complaints, or to broadly similar complaints raised at first instance by the main appellants, at paragraphs 143 and 149 to 156, respectively, of the judgment under appeal. As regards the third complaint, it is in part confused with the complaint alleging failure to take the two-sided nature of the market into account, which was also raised by LBG at first instance, and which is at issue in the third criticism which it puts forward in the context of the plea being analysed, examined at points 73 to 75 below, and, in part, seeks to call into question the Commission’s choice of the relevant market. As regards the latter aspect, the General Court gave its response at paragraphs 168 to 178 of the judgment under appeal. LBG was therefore, in principle, entitled to rely on any errors of law affecting the assessments set out in the abovementioned paragraphs of the judgment under appeal.

72. In that it claims an omission to adjudicate, the complaint being analysed must, however, be rejected on the substance, since, as I have just said, the General Court did in fact respond to the various arguments put forward by LBG in the abovementioned paragraphs of its statement in intervention. For the remainder, in the absence of any challenges specifically directed against the paragraphs of the judgment under appeal containing such a response, the mere assertion that the arguments and evidence submitted were not ‘properly addressed’ by the General Court can be interpreted only as a request to the Court to review those arguments and that evidence which, as such, is inadmissible in an appeal.

73. The same applies to the third criticism put forward by LBG against the judgment under appeal, whereby it takes issue with the General Court for not having taken account of either the importance of the constraints exercised by the ‘other payment systems’ on the issuing market or the two-sided nature of the market.

74. In essence, LBG merely asserts that the General Court was wrong to exclude those questions from its analysis under Article 81(1) EC and to recognise their relevance only for the purpose of the application of paragraph 3 of that article; however, it fails to explain the reasons why such a process is incorrect, but merely reiterates the arguments already put forward in the context of its first and second criticisms and refers to the content of its statement in intervention at first instance. In that regard, I observe that, at paragraphs 180 and 181 of the judgment under appeal, the General Court considered that the criticisms relating to the failure to take the two-sided nature of the market into account ‘[had] no relevance in the context of a plea relating to infringement of Article 81(1) EC’, in that they ‘highlight[ed] the economic advantages that flow from the MIF’. In its cross-appeal, LBG has put forward no argument to challenge such an interpretation of the arguments which it had submitted on that point at first instance or to explain what advantages ought to have been taken into account by the General Court under Article 81(1) EC and the reasons why it was necessary to take them into account in the present case, in view, in particular, of the relevant case-law of this Court and the General Court. I also observe that, contrary to what LBG appears to maintain, at paragraphs 179 and 180 of the judgment under appeal the General Court addressed and rejected the argument alleging failure on the Commission’s part to take ‘other forms of payment into account …, either in the context of a single market with bank card schemes or, in any event, as exerting competitive pressure’. In this case, too, LBG does not challenge the assessment carried out by the General Court. In the absence of more detailed argument, the Court would be required to exercise its power of review on the basis of the mere allegation of a supposedly deficient analysis on the part of the General Court.

75. In that the criticism in question claims a failure to state reasons for the points at issue, it must to my mind be rejected as unfounded, as the relevant grounds of the judgment under appeal enable the reasoning followed by the General Court to be understood.

76. On the basis of the foregoing, the first plea in LBG’s cross-appeal should in my view be rejected in its entirety.

4. The objective necessity of the MIF (first plea in the main appeal)

a) The judgment under appeal

77. The General Court addressed the issue of the objective necessity of the MIF at paragraphs 77 to 121 of the judgment under appeal. Before embarking on that examination, it stated, at paragraph 75, that the main appellants’ reference to the alleged objective necessity of the MIF must be understood ‘to mean that the Commission ought to have concluded that the MIF was an ancillary restriction in relation to the MasterCard system and that, therefore, the Commission was not entitled to consider its effects on competition independently, but should have examined it in conjunction with the effects of the MasterCard system to which it related’.

78. After briefly recalling the principles established in M6 and Others v Commission ( 67 ) concerning ancillary restrictions, the General Court examined and rejected the complaint put forward by the main appellants alleging that wrong legal criteria had been applied (paragraphs 84 to 92 of the judgment under appeal). It then analysed, separately, the alleged objective necessity of the MIF as a default transaction settlement procedure (paragraphs 94 to 99) and as a mechanism for transferring funds to the issuing banks (paragraphs 100 to 121). In the context of the first examination, the General Court approved the Commission’s assessment, namely that the introduction in the MasterCard system of a rule prohibiting ex post pricing would be a less restrictive alternative to the MIF of positive value. Following its analysis, the General Court concluded that the Commission had been entitled to establish that the MIF were not objectively necessary for the operation of the MasterCard system.

b) The first plea in the main appeal

79. By their first plea, the main appellants, supported by RBS, MBNA, HSBC and LBG, claim that the General Court made a number of errors of law and failed to provide adequate reasoning when assessing the objective necessity of the MIF. This plea consists of four parts, alleging, respectively, the application of an incorrect legal test, failure to examine the restriction of competition in its context, substitution of the General Court’s assessment for the Commission’s assessment and the application of an insufficient standard of review.

i) First part of the first plea in the main appeal, alleging application of an incorrect legal test

80. By the first part of their first plea, the main appellants take issue with the General Court for having disregarded the legal test applicable to the examination of the objective necessity of an ancillary restriction, as defined, in particular, in the judgments of this Court in DLG ( 68 ) and of the General Court in M6 and Others v Commission. ( 69 ) Whereas in those precedents the Courts of the European Union held that a restriction is objectively necessary where, in its absence, the objective pursued by the main operation would be impossible to achieve or the ability of the parties to pursue it would be undermined, namely where that operation ‘is difficult or even impossible to implement’, ( 70 ) at paragraph 89 of the judgment under appeal the General Court rendered that test rigid by asserting that ‘[o]nly those restrictions which are necessary in order for the main operation to be able to function in any event may be regarded as falling within the scope of the theory of ancillary restrictions’. In the main appellants’ submission, the correct test to be applied should be realistic from a commercial viewpoint and not require strict necessity in logical terms. It should allow a restriction whose absence ‘would in practice prevent the effective functioning’ of the main operation or its ability to function ‘effectively’ to be regarded as objectively necessary.

81. It should be borne in mind that, according to M6 and Others v Commission, to which many references are made at paragraphs 77 to 82 of the judgment under appeal, ‘the concept of an “ancillary restriction” covers any restriction which is directly related and necessary to the implementation of a main operation’. ( 71 ) According to that judgment, in order to assess the necessity of such a restriction, ‘[i]t is necessary to establish, first, whether the restriction is objectively necessary for the implementation of the main operation and, second, whether it is proportionate to it’. ( 72 ) As regards the examination of the objective necessity of the restriction, that judgment makes clear that ‘[i]t is not a question of analysing whether, in the light of the competitive situation on the relevant market, the restriction is indispensable to the commercial success of the main operation but of determining whether, in the specific context of the main operation, the restriction is necessary to implement that operation’ and that ‘[i]f, without the restriction, the main operation is difficult or even impossible to implement, the restriction may be regarded as objectively necessary for its implementation’. ( 73 )

82. It should also be observed that neither the main appellants nor the interveners dispute, in itself, the legal test applicable to the examination of the objective necessity of an ancillary restriction as defined in M6 and Others v Commission: they merely maintain that the General Court applied that test only in part, notably by failing to assess whether the elimination of the MIF would have rendered the MasterCard system ‘difficult … to implement’. It is appropriate, therefore, first, to define the precise scope of that test and, second, to ascertain whether the General Court erred as it is alleged to have done.

83. As regards the first aspect, I observe that, in European Union law, the ‘ancillary restrictions’ theory originates in a number of precedents of the Court, beginning with Metro SB-Großmärkte v Commission, ( 74 ) where the Court considered that limitations of the autonomy of the parties to an agreement which are ‘necessary’ in order to achieve a particular legitimate commercial aim do not constitute restrictions of competition within the meaning of Article 81(1) EC. In those precedents, the condition of the necessity of the restriction has been applied relatively strictly and the Court has generally required that the limitation in question be necessary in order to permit the implementation of the commercial operation seen in terms of ‘possibility’, ‘effectiveness’ or ‘viability’. ( 75 )

84. The rationale for such a rigorous approach lies mainly in the fact that, in principle, such restrictions automatically benefit from the assessment of compatibility with Article 81(1) EC which the agreement enjoys. Such treatment is the consequence of the positive way in which the legal and economic function fulfilled by the agreement is assessed in the European Union legal order and of the priority which that legal order recognises to the legitimate objective which it pursues, tolerating any (slight) restrictions of competition that might prove necessary in order to achieve that objective. In keeping with that rationale, the classification of ‘objectively necessary ancillary restriction’ can be recognised only to restrictions without which the agreement would be unable fully to satisfy the legal and economic function which characterises it and/or its implementation would be impossible or seriously jeopardised. It is those terms that, to my mind, the reference in DLG to the need to ensure that the main operation ‘functions properly’ and the reference in M6 and Others v Commission to the main operation being ‘difficult … to implement’ must be interpreted. ( 76 )

85. The need to ensure that the examination relating to the objective necessity of an ancillary restriction does not duplicate the examination carried out under Article 81(3) EC has also been referred to in the context of the assessment of the objective necessity of an ancillary restriction. ( 77 ) Thus, it was made clear that it is in the context of the latter provision and not in the context of Article 81(1) EC that restrictions that make it possible to implement the main operation, improve its efficiency or ensure its commercial success and, in general, those that are ‘indispensable’ in view of the competitive situation on the market, must be taken into account. ( 78 )

86. I shall therefore proceed to consider whether, in assessing the objective necessity of the MIF by reference to the MasterCard system, the General Court failed to apply the legal test as defined above.

87. In that regard, I observe that the General Court first of all referred, at paragraphs 77 to 82 of the judgment under appeal, to the principles established in M6 and Others v Commission, including the reference at paragraph 109 of that judgment to the main operation being ‘difficult … to implement’. Next, at paragraphs 88 and 89, the General Court stated that the advantages which the MIF represents for the MasterCard system and also considerations relating to the indispensable nature of the restriction in the light of the competitive situation on the relevant market are not to be taken into account in order to establish their objective necessity under the ‘ancillary restrictions’ theory. ( 79 ) In the same context, the General Court stated, at paragraph 89 of the judgment under appeal, that ‘[o]nly those restrictions which are necessary in order for the main operation to be able to function in any event may be regarded as falling within the scope of the theory of ancillary restrictions’ and, at paragraph 90, it concluded that ‘the fact that the absence of the MIF may have adverse consequences for the functioning of the MasterCard system does not, in itself, mean that the MIF must be regarded as being objectively necessary, if it is apparent from an examination of the MasterCard system in its economic and legal context that it is still capable of functioning without it’. Contrary to the main appellants’ assertion, I do not believe that those passages, taken out of context, can be interpreted as representing an attempt on the part of the General Court to tighten, subsequently, what were already the strict assessment criteria laid down in the case-law referred to at point 83 above.

88. Nor does such an interpretation appear to be confirmed either in the light of a global reading of the grounds of the judgment under appeal devoted to explaining those criteria, or in the light of the assessment carried out in this case by the General Court. The General Court concluded, following its analysis, that the difficulties for the operation of the MasterCard system, highlighted by the main appellants and by the interveners, that the elimination of the MIF would entail were not such as actually to prevent the operation of that system, assessed in its legal and economic context. In that regard, I observe, moreover, that in their application at first instance the main appellants had maintained that the elimination of the MIF would have jeopardised the very survival of the MasterCard system – which could not function solely on the basis of bilateral agreements between issuing and acquiring banks on the interchange fee and in the absence of a fallback rule – and not merely made its implementation more difficult.

89. In the light of the foregoing, I consider that the first part of the first plea in the main appeal must be rejected as unfounded.

ii) Second part of the first plea in the main appeal, alleging failure to examine the restriction of competition in its context

90. In the context of the second part of their first plea, the main appellants put forward, in essence, five complaints.

– The complaint relating to the adoption of a less restrictive alternative that is not the result of market forces

91. The main appellants dispute, in the first place, the assertion at paragraph 99 of the judgment under appeal that the Commission ‘was not … obliged to demonstrate that market forces would compel the issuing and acquiring banks themselves to decide to adopt a rule less restrictive of competition than the MIF’. They maintain that the appropriate counterfactual hypothesis for the purpose of assessing the objective necessity of a restriction must necessarily be the result of market forces and not intervention by a regulatory authority, and that to take a different approach would be to disregard the case-law cited at point 53 above, which requires that the ‘real framework’ that would come about in the absence of the agreement, decision of an association of undertakings or concerted practice be taken into account.

92. The Commission disputes the admissibility of this plea. Its argument consists in asserting that the main appellants cannot put forward, in support of their plea relating to the objective necessity of the MIF, an argument, namely the argument that a counterfactual hypothesis based on a prohibition of ex post pricing is inappropriate, which they raised at first instance in order to support a different plea, namely the plea alleging that there was no restriction of competition. That objection must in my view be rejected. Since the General Court responded to that argument in the part of the grounds of the judgment under appeal dealing with the assessment of the objective necessity of the MIF and the main appellants challenge the legal merits of that response in the same context, the complaint being analysed is to my mind admissible.

93. As for the substance, I observe that it follows from the case-law of this Court and of the General Court that the condition relating to the necessity of a restriction entails an examination of, first, ‘whether the restriction is objectively necessary for the implementation of the main operation and, second, whether it is proportionate to it’, namely whether its material and geographic scope does not exceed (or is strictly limited to) what is necessary in order to implement that operation. ( 80 )

94. Such an examination of proportionality means that, where there is a less restrictive alternative that allows the legitimate objectives pursued by the restriction at issue to be achieved, that restriction cannot be regarded as necessary for the implementation of the main operation and is therefore caught by Article 81(1) EC. The possibility of such an alternative must be assessed in the light of all the relevant elements and, as the General Court observes at paragraph 99 of the judgment under appeal, must be realistic, in particular from an economic viewpoint.

95. On the other hand, the Commission cannot in my view be required, in order to be able to employ a less restrictive alternative scenario in the context of the examination of the proportionate nature of an ancillary restriction, to show that, in the absence of that restriction, market forces would move towards such a scenario.

96. In that regard, the main appellants cannot rely on the case-law cited at point 53 above, which does not relate specifically to the examination of the objective necessity of an ancillary restriction. Admittedly, the Court has recognised, in line with that case-law, that, in order to determine whether a restriction is objectively necessary for the implementation of the main operation with which it is linked, it is necessary to examine what the state of competition would be if the restriction did not exist, ( 81 ) in order to determine whether, in such a case, the operation would be difficult or even impossible to implement. ( 82 ) However, that requirement cannot be interpreted as meaning that, where the Commission considers that a less restrictive alternative exists, it must demonstrate that that alternative would be the consequence of the state of competition in the absence of the limitation imposed by the parties to the main operation, still less that those parties would be likely to adopt it. ( 83 )

97. It follows, conversely, from the case-law that what counts in such a context is, first, that such an alternative is viable, in particular from an economic viewpoint, ( 84 ) and, second, that it is capable of meeting the legitimate objectives for which the restriction in question had been envisaged, without going beyond what is necessary for that purpose, while allowing the main operation to be implemented. ( 85 )

98. Last, I observe, on that point, that the assessment of the proportionate nature of an ancillary restriction, in that it is intended to ascertain whether there are any less restrictive alternatives that would be capable of replacing the requirements agreed between the parties to the main operation and also the balance of the mutual obligations sought by those parties, necessarily contains an aspect of a ‘regulatory’ type, to use the word used by the main appellants.

– The complaint alleging that the introduction into the MasterCard system of a rule prohibiting ex post pricing lacks credibility

99. In the second place, the main appellants take issue with the General Court for having ‘allowed’ the Commission to rely on an alternative scenario that was ‘not credible’.

100. Such a complaint must in my view be rejected as inadmissible, since in reality it seeks a reassessment of the facts by the Court. Furthermore, the underlying argument must also be rejected, as ineffective. Where they assert that it is ‘virtually inconceivable’ that once the MIF have been eliminated market forces would force MasterCard to foreclose other ways of paying issuing banks for the advantages which they would obtain from the acquiring banks and merchants by prohibiting ex post pricing and that logic would dictate precisely the opposite, the main appellants disregard the fact that, following the examination carried out at paragraphs 100 to 119 of the judgment under appeal, the General Court reached the conclusion that no mechanism for transferring funds from acquiring banks to issuing banks was necessary. Thus, contrary to the main appellants’ contention, the General Court did not implicitly accept that the MIF having a positive value were necessary for the operation of MasterCard, but it explicitly stated the contrary. As for the introduction into the MasterCard system of a rule prohibiting ex post pricing, the main appellants’ argument ignores the fact that such a possibility was referred to, at paragraphs 95 and 96 of the judgment under appeal, as a less restrictive alternative to the MIF in order to ensure that the issuing banks were not able, by unilaterally setting the amount of the interchange fee, to exploit the acquiring banks, which were bound by the HACR.

101. I observe, last, incidentally, that in so far as they regard the MIF as a mechanism for remuneration for the services which the issuing banks provide for the acquiring banks and merchants, the main appellants seem to go back on the position which they maintained during the administrative procedure and before the General Court, namely that the MIF are, rather, a mechanism that serves to balance the demands of cardholders and merchants and to allocate the cost of the services between issuers and acquirers of the system. ( 86 )

– The failure on the part of the General Court to take into account the argument that the prohibition of ex post pricing would have the same effects on competition as the MIF and a failure to state reasons in that regard

102. In the third place, the main appellants take issue with the General Court for having failed to take into account the arguments which they raised at first instance concerning the substantial identity, from the viewpoint of the effects on competition, between, on the one hand, the MIF and, on the other, a prohibition on ex post pricing. In each case it is a question of a rule that would be applied by default, would be set centrally by MasterCard and would ‘set the price that is charged between issuers and acquirers’.

103. In that regard, it is sufficient to observe, as I have already done at point 69 above, when examining a similar complaint but forward by LBG in its cross-appeal, that the General Court responded to those arguments at paragraph 143 of the judgment under appeal, where it stated that the difference between those situations lies in the fact that, ‘[b]y comparison with an acquiring market operating without them, the MIF limits the pressure which merchants can exert on acquiring banks when negotiating the MSC by reducing the possibility of prices dropping below a certain threshold’. Admittedly, it follows from that explanation that the General Court focused its attention on the aspects connected with the level of prices, whereas the arguments put forward by the main appellants related rather to the aspects connected with the structure of prices. However, that difference in approach cannot in itself mean that the complaint under consideration, alleging failure to adjudicate, should be upheld. ( 87 ) The assessment set out in that paragraph is, moreover, not amenable to review by the Court, save where the facts or the evidence have been distorted, which is not alleged in the present case.

104. The complaint alleging failure to state reasons in relation to the same issue must also be rejected, as paragraph 143 of the judgment under appeal clearly and unequivocally discloses the reasoning followed by the General Court.

– The complaint alleging failure to take into consideration the restrictive effects of a rule prohibiting ex post pricing on the ‘issuing aspect’ of the MasterCard system

105. In the fourth place, the main appellants claim that ‘the Commission’s zero MIF also creates a restriction on the other side of the two-sided market by prohibiting issuers from charging acquirers for the services that they supply to them’. They maintain, in that regard, that ‘[t]he Commission has refused to focus on this unavoidable effect and instead has concerned itself only with one side of the two-sided market, namely the effect on merchants’.

106. It must be stated that that criticism is aimed solely at the assessment carried out by the Commission and does not identify either the paragraphs in the grounds of the judgment under appeal to which it refers or the errors with which those paragraphs are alleged to be vitiated. In any event, in so far as it must be understood as indirectly criticising the General Court for not having correctly assessed the effects on competition of a reduction of the MIF to zero by comparison with the existing MIF, on the ground that it had failed to take into account the restrictions that such a reduction would cause to the other side in the two-sided market, I observe, first, that the General Court responded to arguments seeking to challenge the Commission’s assessment on the ground that it confined its economic analysis solely to the acquiring market at paragraphs 172 to 182 of the judgment under appeal, where, in essence, it endorses the definition of the issuing and acquiring markets as autonomous markets. Second, I observe that the main appellants do not explain why such a limitation in the relationship between issuing banks and acquiring banks would have restrictive effects on competition in the issuing market. ( 88 ) In that regard, I observe, last, that the explanation that the MIF constitute a mechanism for remuneration for services which the issuing banks provide to the acquiring banks and merchants had been dropped by the main appellants during the administrative procedure.

– The complaint alleging distortion of the decision at issue as interpreted by the Commission at first instance

107. In the fifth, and last, place, the main appellants maintain that the General Court erred in its characterisation of the counterfactual hypothesis as envisaged by the Commission, which, in its rejoinder, had explained that that hypothesis consisted in eliminating the MIF completely and advocating bilateral negotiations between the banks, the prohibition on ex post pricing having been added only as a subsidiary point.

108. In that regard, it is appropriate to point out that, at paragraph 95 of the judgment under appeal, the General Court reproduced in full recital 544 to the decision at issue, where the Commission envisaged, as a less restrictive possible alternative to the MIF, a rule imposing a prohibition on ex post pricing. After considering, at paragraph 96 of the judgment under appeal, that the reasoning followed in that recital did not disclose any manifest error of assessment, the General Court based the remainder of its analysis on the hypothesis set out in that recital. Even on the assumption that, as the main appellants contend, the Commission did in fact substantially alter its position during the proceedings, the General Court’s approach, consisting in adhering to the content of the contested measure, which, moreover, was clear in the case of the recital in question, is not in itself open to criticism.

– Conclusions on the second part of the first plea in the main appeal

109. In the light of all the foregoing considerations, I consider that the second part of the first plea in the main appeal must be rejected.

iii) The third part of the first plea in the main appeal, alleging substitution of the General Court’s assessment for that of the Commission

110. In the context of the third part of their first plea, the main appellants claim that, in its analysis of the objective necessity of the MIF, the General Court substituted its own assessment for that of the Commission by taking into account only a limited number of the grounds on which the Commission relied in the decision at issue.

111. In that regard, I observe that, according to a consistent line of decisions, invoked by the main appellants, the Courts of the Union cannot substitute their own assessment for that of the author of the contested measure, ( 89 ) or, when reviewing the complex economic assessments carried out by the Commission, substitute their economic assessment for that of the Commission. ( 90 )

112. In the first place, the main appellants take issue with the General Court because, ‘[a]s regards the possibility of applying a rule prohibiting ex post pricing, [it] accepted this conclusion with no analysis as to why this is the case’. This complaint seeks in reality to criticise the General Court for having carried out a flawed analysis rather than having substituted its own assessment for that of the Commission and, accordingly, is confused with the arguments relied on in support of the fourth complaint in the plea being analysed, alleging insufficient judicial review. In any event, I observe that the reasoning followed by the General Court at paragraphs 95 to 99 of the judgment under appeal is strictly modelled on the Commission’s reasoning. Consequently, there can be no question, on this point, of any substitution of the General Court’s reasoning and/or grounds for those contained in the decision at issue.

113. In the second place, the main appellants take issue with the General Court for having ‘afforded far more weight’ than the Commission to the ‘wider context of the resources and economic advantages which the banks derive from their card issuing business’ and also to the lack of impact on the MasterCard system in Australia of the reduction in interchange fees imposed by the Central Bank of Australia (‘the Australian example’). ( 91 )

114. In that regard, I consider that the Courts of the Union, in an action for annulment, cannot be prevented from affording, in the context of their review of the legality of the contested measure, more importance to certain elements of the reasoning on which that measure is based than on others, provided that such an approach does not alter the internal logic of the measure at issue to such an extent that there is a de facto substitution of other grounds or another assessment for the grounds or the assessment which it contains. That, in my view, is not the case here. While it is true that the General Court focuses its attention on the analysis of the revenues which the banks derive from their issuing business and places particular importance on the Australian example, neither the Commission’s assessment, nor the grounds of the decision at issue, which are also based on such elements, ( 92 ) appear to have been disregarded or to have had another assessment or other grounds substituted for them.

iv) The fourth part of the first plea in the main appeal, alleging an insufficient standard of review

115. In the context of the fourth part of their first plea, the main appellants, supported by MBNA, HSBC, RBS and LBG, take issue with the General Court for having carried out a very limited judicial review as concerns the objective necessity of the MIF. First, as the Charter and the case-law of the European Court of Human Rights have become applicable, the General Court was required to undertake a comprehensive review of those assessments, not one limited to manifest errors. Second, the General Court did not observe the standard of review required by this Court, in that, first, it applied the ‘manifest error’ test to findings of the Commission not entailing genuinely ‘complex’ economic assessments and, second, it replaced that test by another, less rigorous, test limited to ascertaining their ‘reasonableness’.

116. Before going on to examine those complaints, I observe that, in the context of the part of the plea being analysed, the main appellants also reiterate a number of arguments that overlap with those raised in the third part, examined above. I am referring, in particular, to the assertion that the General Court relied solely on a part of the grounds of the decision at issue, afforded greater importance to those grounds by comparison with that recognised to them by the Commission, and substituted its own assessment for that of the Commission. As those arguments have already been discussed when I examined that part of the plea, I shall merely refer, on this point, to the considerations developed at points 110 to 114 above, not without pointing to a certain substantive contradiction between those allegations and the assertion that the General Court shows excessive deference to the Commission’s power of assessment in economic matters.

117. Having stated that, I observe that the complaints being examined raise once again before the Court the delicate issue of the extent of the judicial review that should be applied to Commission decisions imposing penalties on undertakings for infringements of the competition rules. ( 93 )

118. That review is first of all circumscribed by the type of review that the Courts of the European Union are required to exercise in the context of the judicial function conferred on them by the Treaty. Other than with respect to fines, where they have unlimited jurisdiction under Article 261 TFEU and Article 31 of Regulation (EC) No 1/2003, ( 94 ) those Courts carry out, pursuant to the first paragraph of Article 263 TFEU, a review of legality, which enables them only to dismiss an action for annulment or to annul the contested decision, but not to vary that decision or to determine its appropriateness. A second limit, highlighted by the case-law, is of an institutional nature and results from the separation of powers between the Commission and the Courts of the Union, the Treaty having conferred on the Commission a supervisory role in the sphere of competition law, which includes, as well as investigating and punishing infringements of the competition rules, the task of developing and pursuing a general policy ‘designed to apply … the principles laid down by the Treaty and to guide the conduct of undertakings in the light of those principles’. ( 95 ) In that context, the case‑law has recognised that it is not for the European Union judicature, within the framework of its review of the legality of the decisions of the Commission in competition matters, to substitute its own point of view for that of the Commission, or to vary the decision at issue, as otherwise it would disrupt the interinstitutional balance provided for in the Treaty. ( 96 ) A third limit concerns, last, the nature of the assessments which the Commission is led to carry out when adopting decisions pursuant to Article 81 EC. It has been recognised as having a certain margin of discretion where it carries out complex economic or technical assessments, on the basis of the consideration that these assessments may require a high degree of technical ability and economic expertise and also entail choices of economic policy which it is for the Commission to take. Review of those assessments by the Courts of the Union is therefore restricted. Thus, according to a consistent line of decisions, that review is limited to ‘verifying whether the rules on procedure and on the statement of r