Australian Competition and Consumer Commission v Mastercard Asia/Pacific Pte Ltd (No 2)

This Federal Court decision sits within a larger ACCC case against Mastercard. The ACCC alleges Mastercard entered into 23 Strategic Merchant Agreements with a purpose of substantially lessening competition. According to the judgment, the ACCC says Mastercard sought to foreclose competition from eftpos in debit card acceptance services by using discounted rates on credit transactions as an incentive for merchants to route all, or substantially all, of their debit transactions through the Mastercard network.

That broader competition case was not decided here. Instead, this judgment dealt with a practical but often critical issue in major investigations and litigation: whether certain documents could be withheld from production because they were protected by legal professional privilege. The ACCC challenged Mastercard's privilege claims over 32 documents discovered in the proceeding. Those documents included draft merchant agreements and internal email chains. The court had to decide whether they were confidential communications made for the dominant purpose of giving or receiving legal advice, and whether any privilege had later been lost by waiver.

The disputed documents fell into two categories. First were draft Strategic Merchant Agreements. Some had been drafted by in-house legal counsel. Others contained mark-ups and comments from in-house counsel. The ACCC argued that because drafts can circulate for commercial approval or negotiation, Mastercard needed to do more than simply say lawyers were involved. It said privilege should only extend to the specific parts that actually disclosed legal advice, such as a lawyer's comment or tracked change, unless Mastercard could show the draft as a whole would reveal privileged communications.

Second were email chains where Mastercard claimed privilege over only parts of the chain. The ACCC said Mastercard's evidence was too general and did not sufficiently explain why the redacted passages were privileged. That is a common problem in privilege disputes. A party claiming privilege must explain enough to justify the claim, but cannot reveal the substance of the advice in the process.

The ACCC also raised waiver. It argued that even if privilege originally existed, Mastercard had acted inconsistently with maintaining confidentiality. The ACCC pointed to unredacted production of some emails in February 2020 under a compulsory section 155 notice, and to a March 2020 voluntary submission in which Mastercard referred to one of the email chains by document ID in support of a factual proposition about avoiding bundling of credit and debit transactions.

The court had to decide two connected issues. First, were the draft agreements and redacted email passages confidential communications made for the dominant purpose of giving or receiving legal advice, so that legal professional privilege applied? That question was especially important because the lawyers involved were in-house lawyers and because some drafts had circulated internally in a commercial setting.

Second, if privilege did apply, had Mastercard lost it by waiver? The ACCC argued Mastercard acted inconsistently with maintaining confidentiality by producing unredacted copies under a compulsory section 155 notice and by later referring to one email chain in a voluntary submission. Mastercard said the earlier disclosure was inadvertent, happened during a very large and time-pressured review, and was later corrected. The court therefore had to assess both the character of the documents and the effect of Mastercard's later conduct.

The ACCC criticised the evidence supporting Mastercard's privilege claims as generic and formulaic. Mastercard relied on affidavits from its solicitor, Ms Georgina Foster, who described the nature of the documents based on her review and information from one of Mastercard's internal lawyers, Mr Teong Lee Chuah. Ms Foster also gave evidence that the relevant in-house lawyers did not have commercial roles in addition to their legal responsibilities.

The court accepted that there is a practical difficulty in privilege disputes. A party cannot always give highly specific public evidence about a document without risking disclosure of the very material it says is privileged. For that reason, the court decided to inspect the unredacted documents itself after the hearing. Justice Halley acknowledged that this meant the reasoning could not be fully exposed in public detail and that the ACCC would not be able to make submissions directed to the redacted text itself. But the judge considered that disadvantage was outweighed by the benefit of testing the claims against the actual documents rather than against necessarily limited descriptions of them.

That part of the judgment is important for businesses because it shows that privilege disputes are often resolved by a combination of affidavit evidence, surrounding context and judicial inspection of the documents. A court may not require a business to spell out the substance of legal advice in order to prove privilege if doing so would undermine the privilege claim.

Justice Halley dismissed the ACCC's challenge. The orders recorded that paragraph 1 of the ACCC's second further amended interlocutory application dated 11 July 2025 was dismissed, and that the ACCC was to pay 50% of Mastercard's costs of and incidental to the determination of that paragraph.

On the draft agreements, the court held that privilege attached to the draft agreements as a whole. After examining the drafts in the context of the explanations given by Ms Foster and the covering emails to which the drafts were attached, the judge was satisfied that disclosure would reveal or tend to reveal the content of privileged communications. The court expressly rejected the idea that privilege was limited only to visible comments, mark-ups or comment bubbles. In context, the judge found the involvement of the internal lawyers was not confined to isolated clauses or issues, but extended to the content of the draft agreements more generally.

On the email chains, the court reviewed the redacted portions of documents 10, 11, 19 to 25, 38, 39, 40, 41, 42 and 43 and held that the privilege claims were justified. The judgment records that the ACCC had attacked the adequacy of Mastercard's evidence in relation to several of those documents, but after inspection the court was satisfied the redacted passages disclosed confidential communications made for the dominant purpose of legal advice.

On waiver, the court ultimately held there had been no express or implied waiver. The extract records that the judge considered the ACCC's submissions on implied waiver had "much force". Even so, the court was satisfied that the relevant disclosures were inadvertent and that privilege had not otherwise been waived on the facts before it.

The judgment restates orthodox Australian privilege principles. Legal professional privilege applies to confidential communications made for the dominant purpose of giving or receiving legal advice or legal services, including in pre-trial procedures. The court cited leading authorities including Esso, Daniels and Waterford. It also confirmed that privilege can apply to communications with in-house lawyers, provided they are consulted in a professional legal capacity in relation to a professional matter and the communications are confidential and arise in the course of a lawyer-client relationship.

That point matters because in-house lawyers can sometimes wear mixed hats. Here, Mastercard led evidence that the relevant in-house lawyers did not have commercial roles in addition to their legal responsibilities. That supported the conclusion that their involvement was legal, not merely commercial.

A central issue was whether draft agreements can be privileged beyond a lawyer's visible edits. The ACCC relied on Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Limited (No 4) to argue that where drafts circulate for non-privileged purposes such as commercial approval, privilege should be confined to the specific legal comments. Justice Halley distinguished Asahi. In that case, the communications involved an external financial adviser giving financial advice in the course of preparing transaction documents. The judge said that was fundamentally different from internal communications within a client organisation about draft transaction documents first prepared by, or to be settled by, lawyers.

The court then relied on authority recognising that privilege can extend to documents recording legal work, including draft agreements, where disclosure would reveal or tend to reveal the content of privileged communications. After inspecting the drafts, the judge concluded that was the position here. The privilege therefore attached to the draft agreements as a whole, not just to isolated comments or tracked changes.

On waiver, the court considered the realities of large-scale document review under compulsory notice. Mastercard had received a section 155 notice in December 2019, later varied in January 2020, and had to respond by 18 February 2020. Its solicitors sought an extension because more than 100,000 documents had been identified for potential review, but the ACCC refused. The judgment says approximately 75,000 documents were reviewed and 7,437 were produced on time. Some copies of the disputed email chain were produced without redactions, and the review database recorded those documents as coded privilege "no" by a junior associate.

The court referred to the High Court's decision in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd, which recognised that mistakes are more likely in large commercial matters and that where a privileged document is inadvertently disclosed, a court should ordinarily permit correction of the mistake. The extract available for this page stops before the end of the court's full discussion, but it clearly records the judge's conclusion that the alleged waivers were inadvertent and that privilege had not otherwise been waived.

For most businesses, the practical significance of this case is not about payment networks. It is about preserving legal advice properly. If your business asks a lawyer, including an in-house lawyer, to review a draft contract, the whole draft may sometimes be privileged if the draft reflects the lawyer's work and disclosure would reveal the substance of legal advice. But that will depend on the facts. The legal role must be real, confidentiality must be maintained, and the document must be part of a legal advice process rather than just a general commercial workflow.

The case also shows why regulator responses need discipline. A compulsory notice from the ACCC can involve huge volumes of material and very short deadlines. Courts may recognise that mistakes happen in those conditions, but businesses should not assume an accidental disclosure will always be forgiven. Delay, inconsistent later use of the document, broad internal circulation, or poor records about how the mistake occurred can all make a waiver argument harder to resist.

If your business uses in-house counsel, make sure their legal role is documented and distinguishable from commercial decision-making. If your business is preparing a regulator production, build in a privilege review process that covers drafts, attachments, email chains and later versions of the same document. If a mistake is discovered, act quickly and consistently.

The judgment is dated 22 August 2025. It records that the ACCC's challenge to Mastercard's privilege claims failed and that the ACCC was ordered to pay 50% of Mastercard's costs of that part of the interlocutory application. The broader competition proceeding continued separately.

The reasons available for this page contain the key findings and substantial reasoning, but the text available stops before the end of the waiver discussion. That means this page can confidently explain the result and the main reasoning, while treating some finer detail of the waiver analysis with appropriate caution.