European Commission imposes €570m fine on Mastercard over breach of antitrust rules

Maria Nikolova

The Commission has determined that because of Mastercard’s cross-border acquiring rules retailers paid more in bank services to receive card payments than if they had been free to shop around for lower-priced services.

The European Commission today announces that it has imposed a fine of €570,566,000 on Mastercard, the second largest card scheme in the European Economic Area (EEA) in terms of consumer card issuing and value of transactions. Mastercard has been found to be in breach of EU antitrust rules by limiting the possibility for merchants to benefit from better conditions offered by banks established elsewhere in the Single Market.

Under the MasterCard scheme, banks offer card payments-related services under common card brands, Mastercard and Maestro. Mastercard’s rules obliged acquiring banks to apply the interchange fees of the country where the retailer was located.

Before December 9, 2015, when the Interchange Fee Regulation introduced caps, interchange fees varied considerably from one country to another in the EEA. As a result, retailers in high-interchange fee countries could not benefit from lower interchange fees offered by an acquiring bank located in another Member State.

The Commission concluded that Mastercard’s rules until December 9, 2015 infringed Article 101 of the Treaty on the Functioning of the European Union (TFEU), which prohibits agreements between companies or decisions by an association of undertakings that prevent, restrict or distort competition within the EU’s Single Market.

The Commission takes the view that Mastercard and its licensees (who issue Mastercard and branded cards to cardholders or acquire transactions with those cards for retailers) together form an association of undertakings.

In April 2013, the Commission launched a formal antitrust investigation against Mastercard to assess whether these rules on ‘cross-border acquiring’ were in breach of EU antitrust rules. In July 2015, the Commission issued a Statement of Objections.

The Commission investigation determined that because of Mastercard’s cross-border acquiring rules retailers paid more in bank services to receive card payments than if they had been free to shop around for lower-priced services. This led to higher prices for retailers and consumers, to limited cross-border competition and to an artificial segmentation of the Single Market.

On this basis, the Commission concluded that Mastercard’s rules prevented retailers from benefitting from lower fees and restricted competition between banks cross border, in breach of EU antitrust rules. The infringement ended when Mastercard amended its rules in view of the entry into force of the Interchange Fee Regulation.

The Commission acknowledges Mastercard’s co-operation. This has led to a 10% fine reduction.

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