The European Commission has fined credit card giant Mastercard €570.57 million for breaching the EU’s rules governing antitrust.
The Commission found that Mastercard had deliberately limited the potential for merchants to benefit from improved conditions offered by other banks in the Single Market before 2015. The rules the company imposed on retailers conducting cross-border transactions led to retailers and consumers paying higher tariffs to receive bank payments than if they had been freely able to shop around for cheaper services.
More than half of non-cash financial transactions made by consumers and businesses across the EU are conducted through debit and credit cards; and Mastercard represents the second largest card scheme in the European Economic Area both in terms of card issuing and transaction value. The Commission’s antitrust investigation found that until December 2015, when the EU’s rules governing cross-border financial interchange fees were changed to introduce fee caps, Mastercard had been in breach of Article 101 of the Treaty on the Functioning of the European Union, which prohibits coordinated activity by businesses to “prevent, restrict or distort” competition across the Single Market.
Commissioner Margrethe Vestager, Commissioner in charge of competition policy, said: “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.”
The fine imposed on Mastercard was set with reference to the Commission’s 2006 guidelines on fines, taking into account the duration, gravity and financial value of the violations. Mastercard cooperated fully with the investigation and has adjusted its charging practices to comply with EU law since the investigation began; in recognition of the company’s cooperation Mastercard was granted a fine reduction of 10 per cent.