Brussels fines Mastercard €570m for restricting competition

Brussels has fined Mastercard €570.6m for limiting banks’ ability to shop around between member states to offer lower fees, thereby restricting competition between banks and raising the cost of card payments for both retailers and customers.

Mastercard levies a so-called interchange fee on transactions between the cardholder’s bank and the retailer’s bank. Historically the rates varied considerably between member states but in December 2015 the EU passed a regulation capping the cost and levelling the playing field within the bloc.

“By preventing merchants from shopping around for better conditions offered by banks in other member states, Mastercard’s rules artificially raised the costs of card payments, harming consumers and retailers in the EU,” Margrethe Vestager, the bloc’s competition commissioner, said on Tuesday.

The fine was reduced by 10 per cent because the company co-operated with the European investigation and acknowledged both the facts of the case and the breach. Retailers and customers can seek damages from Mastercard through the courts based on the commission decision.

EU officials have been cracking down on credit card company fees for more than a decade. In December 2015 the bloc’s interchange fee regulation capped the fee charged by the US payment group and its rival Visa within the European Economic Area to a maximum of 0.2 per cent of transaction value for debit cards and 0.3 per cent for credit cards.

The US payment group also had a seven-year antitrust dispute over its cross-border fees to retailers. The commission decided in 2007 that the company had restricted competition and inflated charges — the European court upheld that decision in 2014.

Mastercard said: “Today’s decision by the European Commission puts an end to a legacy investigation concerning Mastercard’s European central acquiring rules that [had been] in place until 2015.”

It added: “This decision relates to historic practices only, covers a limited period of time of less than 2 years and will not require any modification of Mastercard’s current business practices.”