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From Antitrust Law Daily, January 22, 2019

EC fines MasterCard €570M over interchange fees

By J. Preston Carter, J.D., LL.M.

MasterCard’s European Union interchange fee rules artificially raised card fees and breached European antitrust rules, resulting in a €570 million fine.

The European Commission (EC) has fined MasterCard €570 million (approximately U.S. $648 million) after concluding that MasterCard’s interchange fees for transactions in the EU using MasterCard cards issued in other regions of the world breach European antitrust rules by setting an artificially high minimum price for processing these transactions. The EU found that Mastercard’s cross-border acquiring rules prevented retailers from benefitting from lower fees and restricted competition between banks cross border.

In April 2013, the EC opened a formal antitrust investigation against MasterCard to assess whether its rules on cross-border acquiring were in breach of EU antitrust rules. In July 2015, the EC issued a Statement of Objections. The investigation found that because of MasterCard’s cross-border acquiring rules retailers paid more in bank services to receive card payments than if they had been free to shop around for lower-priced services. This led to higher prices for retailers and consumers, to limited cross-border competition, and to an artificial segmentation of the Single Market.

The EC’s press release noted that card payments play a key role in the Single Market, both for domestic transactions and for payments across borders or over the internet. European consumers and businesses make more than half of their non-cash payments through cards.

EC Competition Commissioner Margrethe Vestager said: "European consumers use payment cards every day, when they buy food or clothes or make purchases online. By preventing merchants from shopping around for better conditions offered by banks in other Member States, Mastercard's rules artificially raised the costs of card payments, harming consumers and retailers in the EU."

Companies: MasterCard Inc.

MainStory: TopStory Antitrust

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