The European Commission has issued a new statement of
objections to MasterCard for alleged infringements of Article 101 TFEU relating
to its cross-border and inter-regional interchange fees. The Commission alleges that MasterCard is
restricting competition among banks by preventing them from offering lower fees
to retailers based in another EEA member state where the fees are higher.
The Commission has also raised concerns about the MasterCard
‘inter-regional’ interchange fees for transactions made in the EEA by
individuals whose cards were not issued in the EEA claiming that these were up
to five times higher than on cards that were issued in Europe.
The announcement represents the latest of a series of legal
battles between MasterCard and the EU competition authorities. EU and national competition authorities have
maintained their scrutiny of the level of interchange fees imposed in
four-party credit systems. This is a
long running debate where initial competition concerns have arisen due to the
‘multi-lateral’ nature of setting interchange fees among competing banks.
On 19 December 2007 the Commission issued an infringement
decision against MasterCard in relation to its cross-border multilateral
interchange fees. The Commission found
that MasterCard had infringed Article 101 TFEU in that the arrangements
restricted competition between acquiring banks and increased the costs of
accepting cards without leading to efficiencies within the meaning of Article
101(3) TFEU. On 11 September 2014, the
Court of Justice dismissed the appeal and cross-appeals challenging a General
Court judgment that upheld the Commission’s 2007 decision.
In a separate investigation on 26 February 2014 the
Commission announced that it had decided, under Article 9 of Regulation 1/2003,
to make legally binding the commitments offered by Visa Europe to address
concerns about its inter-bank fees.
These investigations at EU level must also be seen in the
context of the investigations of the OFT concerning UK domestic point-of-sale
transactions using MasterCard Card and Visa cards. On 4 November 2014, the CMA announced that it
had decided that at this time it will not progress its investigations into Visa
and MasterCard interchange fees.
The caps on interchange fees for cards issued and used in
the EU (0.2% for debit cards and 0.3% for credit cards) as accepted by MasterCard
and Visa as a result of this enforcement action are now established in
Regulation 2015/751 on interchange fees for card-based payment transactions. The regulation establishes uniform technical
and business requirements for payment card transactions within the EU where
both the payer’s and the payee’s service provider are established in the EU. Inter-regional interchange fees are not however
covered by Regulation 2015/751. Without
considering the merits of imposing industry-wide regulation, the change in
approach is significant as it amounts in effect to the imposition of
industry-wide rules based on the outcome of specific investigations.
Case 40049: MasterCard
II; Commission press release IP/15/5323 (9 July)
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