The European Commission has formally charged MasterCard with breaking antitrust rules and restricting competition between banks by pre-determining interchange fees charged for cross-border card transfers.
The EC says it has sent MasterCard a supplementary Statement of Objections (SO) outlining the charges.
The Commission says it "takes the preliminary view that MasterCard restricts competition between member banks by pre-determining a minimum price retailers must pay for accepting MasterCard and Maestro branded payment cards".
The regulator warns it could "prohibit MasterCard's interchange fees if the commission is ultimately not convinced that possible efficiencies of MasterCard's interchange fees sufficiently outweigh any restrictive effects on price competition between merchant banks".
This latest SO follows an earlier statement of objections sent to MasterCard in October 2003 which detailed the Commission's concerns that cross-border interchange fees are too high.
Earlier this year the Commission threatened the payment card industry with antitrust action following a sector inquiry which showed several barriers to entry into the European markets, including technical obstacles and practices by banks and networks that may raise costs for new entrants.
Earlier this month MasterCard claimed victory in a six-year battle with the UK's Office of Fair Trading over interchange fee arrangements after the Competition Appeals Tribunal (CAT) quashed an earlier ruling by the watchdog that fees that existed before November 2004 had infringed competition rules.