Brussels, 30th June 2006
The European Commission can confirm that it has sent a supplementary Statement of Objections (SO) to MasterCard on 23 June 2006. In its SO the Commission takes the preliminary view that MasterCard restricts competition between member banks by pre-determining a minimum price retailers must pay for accepting MasterCard and Maestro branded payment cards. The Commission’s preliminary view is that such behaviour is contrary to the EC Treaty’s ban on restrictive business practices (Article 81).
The SO supplements a preceding SO of 24 September 2003 and concerns MasterCard’s “cross-border interchange fees”. These inter-bank fees are paid by merchant banks to card issuing banks for over the counter payments with a MasterCard or Maestro branded payment card. MasterCard’s cross-border interchange fees in particular apply to all cross-border transactions in the EU and to domestic transactions in nine EU Member States. Approximately 45% of all payment cards issued in the European Economic Area bear either a MasterCard or a Maestro logo. MasterCard’s debit cards are accepted at some 85% of merchants accepting debit cards in the EEA.
In 2004 a total of 23 billion card payments were made in the EU, with an overall value of €1350 billion.
The Commission’s SO is only of a preliminary character. MasterCard will be given access to the file and the opportunity to be heard in an oral hearing before the Commission decides whether MasterCard has indeed violated the EC Treaty’s anti-trust rules. Such a decision could prohibit MasterCard’s interchange fees if the Commission is ultimately not convinced that possible efficiencies of MasterCard’s interchange fees sufficiently outweigh any restrictive effects on price competition between merchant banks.
The suspected competition problem identified by the investigation into MasterCard illustrates one of the problems identified in the financial services sector competition inquiry as regards payment cards, namely interchange fee agreements. The sector inquiry has emphasised the importance of agreements between banks that raise the cost of card acceptance (see IP/06/496 and MEMO/06/164). However, the MasterCard inquiry predates the financial services sector inquiry and information collected in the sector inquiry has not been used in the MasterCard inquiry. The MasterCard investigation has been carried out separately.