EU fines Mastercard 570 million euro over cross-border obstruction

Written by on January 22, 2019 in Europe - Comments Off on EU fines Mastercard 570 million euro over cross-border obstruction

The European Commission said on January 22 that it has fined Mastercard a total of 570.6 million euro for limiting the possibility for merchants to benefit from better conditions offered by banks established elsewhere in the EU single market, in breach of the bloc’s antitrust rules.

The Commission’s investigation, launched in 2013, found that Mastercard’s rules prevented retailers from potentially benefitting from lower interchange fees, requiring banks to always apply the rates in the country where the retailer was located.

“European consumers use payment cards every day, when they buy food or clothes or make purchases online. 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,” European competition commission Margrethe Vestager said in a statement.

As a result, retailers paid more in bank services to receive card payments, leading to higher prices for retailers and consumers, limiting cross-border competition and causing an artificial segmentation of the single market, the EC said.

Mastercard later amended its rules in line with the interchange fee regulation and co-operated with the Commission, acknowledging the facts and the infringements of EU rules. In return, the EC said it granted Mastercard a 10 per cent reduction of the fine that was levied.

(Photo: Taekwonweirdo/flickr.com)

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