EC launches competition investigation into MasterCard inter-bank fees

EC launches competition investigation into MasterCard inter-bank fees

The European Commission has launched a new antitrust probe into the inter-bank fees MasterCard charges for processing transactions.

Back in 2007 the EC ruled that multilateral interchange fees charged for cross-border transactions made with MasterCard cards within the European Economic Area (EEA) violated competition rules. (A court rejected MasterCard's appeal last year but the card firm has appealed that judgement.)

Now, the Commission is turning its attention to the fees MasterCard imposes on payments made by cardholders from non EEA countries, which apply, for example, when a US tourist uses his credit card to make a purchase at a merchant in Germany.

The investigation will also look into all rules on 'cross-border acquiring' in the MasterCard system that limit the possibility for a merchant to benefit from better conditions offered by banks established elsewhere.

Also up for scrutiny are related business rules or practices which "amplify" the Commission's competition concerns, like the 'honour all cards rule' which obliges a merchant to accept all types of MasterCard cards.

In a statement, the EC says these fees and practices may restrict competition, with costs generally passed on to merchants, adding that "ultimately, such behaviour is liable to slow down cross-border business and harm EU consumers".

MasterCard says that it "intends to fully cooperate with the Commission. As a global electronic payments company, MasterCard always aims to balance the interests of both consumers and retailers to ensure that each party pays its fair share of the costs for the benefits it receives."

The Commission also plans to propose before the summer a "regulation on inter-bank fees for card payments that will ensure legal certainty and a durable level playing field across the EU for all providers".

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