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The European Commission has fined Mastercard 571 million euros, or around $650 million for anti-competitive behavior.

Mastercard limited the possibility for merchants to benefit from better conditions offered by banks established elsewhere in the Single Market, in breach of EU antitrust rules.

“European consumers use payment cards every day, when they buy food or clothes or make purchases online. 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 Commissioner Margrethe Vestager, in charge of competition policy.

Card payments play a key role in the Single Market, both for domestic transactions and for payments across borders or over the internet. European consumers and businesses make more than half of their non-cash payments through cards.

When a consumer uses a debit or credit card in a shop or online, the bank of the retailer (the “acquiring bank”) pays a fee called an “interchange fee” to the cardholder’s bank (the “issuing bank”).

The acquiring bank passes this fee on to the retailer who includes it, like any other cost, in the final prices for all consumers, even those who do not use cards.

Mastercard’s rules obliged acquiring banks to apply the interchange fees of the country where the retailer was located. Prior to 9 December 2015, when the Interchange Fee Regulation introduced caps, interchange fees varied considerably from one country to another in the EEA.

As a result, retailers in high-interchange fee countries could not benefit from lower interchange fees offered by an acquiring bank located in another Member State.

In April 2013, the Commission opened a formal antitrust investigation against Mastercard to assess whether these rules on ‘cross-border acquiring’ were in breach of EU antitrust rules. In July 2015, the Commission issued a Statement of Objections.

The Commission investigation found that because of Mastercard’s cross-border acquiring rules retailers paid more in bank services to receive card payments than if they had been free to shop around for lower-priced services. This led to higher prices for retailers and consumers, to limited cross-border competition and to an artificial segmentation of the Single Market.

On this basis, the Commission concluded that Mastercard’s rules prevented retailers from benefitting from lower fees and restricted competition between banks cross border, in breach of EU antitrust rules. The infringement ended when Mastercard amended its rules in view of the entry into force of the Interchange Fee Regulation.

As a result, the Commission decided to impose a fine on Mastercard. The Commission granted Mastercard a 10 percent fine reduction for cooperating with its investigation.

“This decision relates to historic practices only, covers a limited period of time of less than two years and will not require any modification of Mastercard’s current business practices,” the company said in a statement.

Mastercard added that the size of the fine was “consistent with the amount previously disclosed by Mastercard that would be taken as a charge” in the fourth quarter of 2018.

Mastercard flagged last month that it expected a $650 million fine and said the closure of the long-running chapter represents ‘an important milestone for the company.’

Major credit-card companies have been engaged in a long-drawn-out disagreement with regulators in the U.S. and Europe over fees charged to merchants.

In December, the European Commission said Mastercard and Visa Inc. agreed to lower fees charged to merchants when they accept debit or credit card issued outside the region.

In the United States, Visa and Mastercard were part of a group of companies that agreed to a $6.2 billion settlement with merchants related to card fees in September last year.

Mastercard is the second largest card scheme in the European Economic Area (EEA) in terms of consumer card issuing and value of transactions.

Under the MasterCard scheme, banks offer card payments-related services under common card brands, Mastercard and Maestro. Mastercard acts as a platform through which issuing banks provide cardholders with payment cards, ensure the completion of the card payment transaction and transfer funds to the retailer’s bank.


  • In 2015, Citigroup Inc’s consumer bank had been ordered to pay $700 million in relief to borrowers for illegal credit card practices. Citi also had to pay civil penalties of $35 million each to the consumer finance watchdog and the Office of the Comptroller of the Currency.
  • In 2014, Bank of America was ordered to pay roughly $772 million in refunds to customers and fines to federal regulators to settle allegations that the bank used deceptive marketing and billing practices involving credit card products. The bank also had to pay a $20 million fine to the Consumer Financial Protection Bureau and $25 million to the Office of the Comptroller of the Currency.
  • In 2013, Federal regulators slapped JPMorgan Chase with $389 million in penalties for deceiving millions of customers into buying costly and unneeded services when they signed up for credit cards. The bank regulator hit JPMorgan with an additional $60 million civil penalty based, in part, on the scope and duration of the violations.

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