Brussels, 11/09/2014 (Agence Europe) - On Thursday 11 September, the Court of Justice of the EU rejected (case C-382/12 P) MasterCard's appeal against the verdict of the General Court (T-111/08) upholding the decision by the Commission in December 2007 banning the multilateral interchange fees (MIF) applied within the MasterCard card payment system.
The Commission banned these MIFs, which correspond to a proportion of the price of a card transaction passed on to merchants by MasterCard and companies representing it (MasterCard Inc. and its subsidiaries MasterCard Europe and MasterCard International Inc.), on the grounds that these have the effect of setting a lower limit on the costs invoiced to merchants, thereby restricting competition on the basis of price. Furthermore, the Commission argued that MasterCard had failed to demonstrate that the MIFs were necessary for the effective functioning of the MasterCard payment system. In 2012, the General Court of the EU rejected an appeal brought by MasterCard and upheld the Commission's decision (see EUROPE 10620).
Following an appeal brought to it in its turn, the Court of Justice today rejected MasterCard's appeal, upholding the verdict of the General Court and essentially following the conclusions of its Advocate General (see EUROPE 11008). In its ruling, it confirms that: - MasterCard could be described as an association of companies, as the group and its representative companies had the intention, or at least agreed, to coordinate their behaviour and that their collective interests coincided with those of MasterCard when taking the same decisions - particularly as the same companies have for many years pursued the same objective of market regulation in the framework of the same organisation, albeit in different forms; - the negative consequences which could affect the MasterCard system in the absence of MIFs did not in themselves mean that the MIFs were “objectively necessary” to guarantee its functioning. The Court found that the General Court had been correct in concluding that the MIFs had restrictive effects on competition and, like the Commission, correctly concluded that the problems caused by removing the MIFs could be resolved by banning “ex-post” tariffs (banning the bank of issue and of acquisition from defining the level of the interchange fees when a purchase is made by a cardholder). Lastly, the Court found that the General Court had taken account of the two-sided nature of the MasterCard system, as it analysed the “issue” and “acquisition” planks whilst acknowledging the existence of interactions between the two.
The Commission welcomed this verdict through the spokesperson to DG Competition, describing it as a “victory for consumers”, who have for too long had to pay undeclared charges on their national and cross-border credit card transactions. The European Executive has called upon MasterCard “voluntarily” to comply, in order to avoid a continued legal battle. (FG)