EU anti-trust regulators have issued a formal 'Statement of Objections' against MasterCard, accusing the card scheme of using its rules to artificially inflate fees and of over-charging retailers for purchases made by non-EU cardholders.
The European Commission believes that MasterCard's rules prevent banks from offering lower interchange fees to retailers based in another Member State where charges may be higher. As a result, says the Commission, retailers cannot benefit from lower fees elsewhere and competition between banks cross-border may be restricted, in breach of European antitrust rules.
It also alleges that MasterCard's interchange fees for transactions in the EU using cards issued elsewhere in the world breach competition rules by setting an artificially high minimum price for processing these transactions.
Commissioner Margrethe Vestager, in charge of competition policy, says: "We currently suspect MasterCard is artificially raising the costs of card payments, which would harm consumers and retailers in the EU. We have concerns both in relation to the rules MasterCard applies to cross-border transactions within the EU, as well as the fees charged to retailers for receiving payments made with cards issued outside Europe. MasterCard now has an opportunity to respond to our charges".
In a statement, MasterCard says: "We will be formally responding to the statement of objections and are also working with the European Commission on the issue as part of an ongoing constructive dialogue."
It is the second time EU regulators have rounded on MasterCard. In September, the card scheme lost a seven-year battle with the European Commission over the validity of its interchange fees for cross-border card payments, following a decisive judgement at the EU's highest court.
If the Commission's preliminary view on the latest charge sheet is confirmed, it can impose a fine on MasterCard.