EU investigating MasterCard

A formal investigation by the European Union Commission about whether MasterCard Worldwide is hindering competition in the European Economic Area (EEA) in violation of EU antitrust rules opened April 9, 2013. In a press release about the investigation, the commission stated it is concerned some of MasterCard's cross-border and Internet fees and practices may be anti-competitive.

The EUC estimates Europeans make more than 40 percent of their noncash payments by credit card every year. It noted that MasterCard's cross-border inter-bank fees within the EEA were prohibited in 2007. A 2012 judgment rejected MasterCard's appeal of that prohibition; the company is now appealing that decision. The EUC stated it is already investigating Visa Europe for what it considers to be similar practices.

The investigation

The commission said it wants to limit fees charged to consumers who do not live within the EEA, such as "when a U.S. tourist uses his MasterCard credit card to make a purchase at a merchant in the EEA." It intends to examine inter-bank fees paid by cardholders from non-EEA countries; fees on cross-border acquiring that limit a merchant's ability to take advantage of better bank offers; and MasterCard rules or practices such as the "honor all cards rule," which demands that merchants accept all types of MasterCard cards and thus aroused EUC concerns about competitive fairness.

"Ultimately, such behavior is liable to slow down cross-border business and harm EU consumers," the press release stated. "In addition to its antitrust enforcement action, the Commission intends to propose before the summer a regulation on inter-bank fees for card payments that will ensure legal certainty and a durable level playing field across the EU for all providers."

Because of the complexity of the case, the EUC said there is no legal deadline to complete its investigation into the two card companies.

Editorial Note:

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