Jan. 22, 2019
The European Commission has fined Mastercard about $647.5.million (570 million euros) relating to charges that it prevented merchants from finding better terms from other banks in the common market, according to a press release.
The EC opened an antitrust investigation in 2013 of Mastercard's rules over the interchange fee. The fee is what a retailer's bank, known as the acquiring bank, pays to the cardholder's bank when a consumer buys something with a credit or debit card and the retailer passes on to the buyer in the way of higher prices.
Mastercard required the acquiring bank to use the fee based on the location of the retailer, however prior to the introduction of caps in December 2015, interchange fees varied from country to country in the European Economic Area, according to officials. The investigation looked into whether Mastercard's rules on cross-border acquiring were a violation of antitrust rules.
"European consumers use payment cards every day, when they buy food or clothes or make purchases online," said Commissioner Margrethe Vestager, who presides over competition policy, in the release. "By preventing merchants from shopping around for better conditions from banks in other member states, Mastercard's rules artificially raised the costs of card payments, harming consumers and retailers in the EU."
Mastercard cooperated with the probe and acknowledge infringing upon the rules, according to the release. Mastercard got a 10 percent reduction in the fine as a result.
A spokesman for Mastercard was not immediately available.
Topics: Card Brands, Region: EMEA, Regulatory Issues
Companies: MasterCard
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