The UK competition watchdog says that the current agreement between members of MasterCard UK Members Forum Limited on common fees infringes Article 81 of the EC Treaty and the Chapter I prohibition of the Competition Act 1998.

The OFT believes that the agreement leads to an unduly high fee being paid to card issuing banks on every such transaction. The cost of these fees is passed on to retailers and ultimately to consumers, says the watchdog.

The latest ruling takes into account new powers granted to the OFT for the enforcement of EU competition law and evidence presented since the last OFT statement of objections in February last year.

Mastercard and its member banks have been given a final opportunity to make written and oral representations to the OFT before it makes a final ruling.

The OFT says it has also launched an investigation into the agreement on the multilateral interchange fees applicable to UK transactions using Visa cards.