The European Union (EU) EU said today that US credit- card giant MasterCard overcharged customers and retailers, having already found rival Visa...
The European Union (EU) EU said today that US credit- card giant MasterCard overcharged customers and retailers, having already found rival Visa at fault over fees levied on card payments.
The European Commission said in a preliminary statement of objections that it believed MasterCard was in breach of EU single market competition rules.
“Many consumers use payment cards every day, when they shop for food, clothes or purchase anything online. We currently suspect MasterCard is artificially raising the costs of card payments, which would harm consumers and retailers in the EU,” EU Competition Commissioner Margrethe Vestager said.
“We have concerns both in relation to the rules MasterCard applies to cross-border transactions within the EU, as well as the fees charged to retailers for receiving payments made with cards issued outside Europe,” Vestager said.
“MasterCard now has an opportunity to respond to our charges.”
MasterCard confirmed it had received the Commission’s statement of objections and would respond in due course.
“We are also working with the European Commission on the issue as part of an ongoing constructive dialogue.” it said.
“Throughout this procedure we have kept the needs of both consumers and merchants in mind and aim to further encourage the uptake of electronic payments inside and outside the European Union.”
The Commission, which polices competition policy, has been investigating MasterCard and Visa for years over the fees they charge following complaints by customers and retailers alike that they were getting a raw deal.
It said today that its main concern was over what are known as interchange fees, the charge for using a card and which varies from country to country.
MasterCard’s rules meant banks could not offer lower interchange fees to retailers based in another country where the charge might be higher, it said.
“As a result, retailers cannot benefit from lower fees elsewhere and competition between banks cross-border may be restricted, in breach of European antitrust rules.”
In 2013, Visa cut its fees by up to 60 per cent and agreed to “reform its rules to facilitate cross-border competition” following a similar Commission probe.
The sending of a formal statement of objections does not prejudge the outcome of the investigation.
The Commission can fine a company up to 10 per cent of annual sales if it is found in breach of EU competition rules.