On Tuesday 22 January, the European Commission imposed a fine of €570.566 million on Mastercard, claiming that the payment system had obstructed the possibility for merchants to benefit from better conditions offered by banks established in other EU Member States, as part of interchange fees.
"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", said Margrethe Vestager, Commissioner for Competition, commenting on the Commission's decision.
This follows the Statement of Objections sent to Mastercard in July 2015 (see EUROPE 11355) concerning interchange fees.
An interchange fee is the amount paid by a merchant's bank to a buyer's bank when the latter makes purchases by credit card. This commission is invoiced by the merchant's bank to the merchant, who, de facto, passes this amount on to the price paid by consumers.
In this case, the Commission criticised Mastercard for forcing merchant banks to apply the interchange fees of the country in which they were established. While there are now ceilings, since the entry into force of the Regulation on these fees at the end of 2015 (see EUROPE 11330, 11569), interchange fees have varied very significantly in the past. As a result, merchants could not, under the system imposed by Mastercard, benefit from the lower commissions that were offered by banks in other Member States. It should be noted that Mastercard terminated this process prior to the entry into force of the above-mentioned regulation.
At the end of its investigation, the institution considered that, as a result of this system, merchants paid more for banking services that allowed them to accept card payments than if they had been free to choose cheaper services. The Commission therefore considers that this system has had the effect of increasing prices for consumers and traders, limiting cross-border competition and artificially segmenting the single market.
For this reason, it found a violation of EU law relating to anti-trust and abuse of dominant position and imposed a fine of almost €571 million on the company. As Mastercard cooperated in this case, it was also granted a 10% reduction of the fine.
The company has taken note of the Commission's decision and should not contest it. "Mastercard sees the closure of this anti-trust chapter as an important milestone for the company", said a company spokesperson. (Original version in French by Lucas Tripoteau)