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Antitrust: Commission notes MasterCard's decision to temporarily repeal its cross-border Multilateral Interchange Fees within the EEA

Commission Européenne - MEMO/08/397   12/06/2008

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MEMO/08/397

Brussels, 12 June 2008

Antitrust: Commission notes MasterCard's decision to temporarily repeal its cross-border Multilateral Interchange Fees within the EEA

The European Commission has noted that MasterCard has temporarily repealed with effect from 21st June its multilateral interchange fees (MIF) for cross-border payment card transactions with MasterCard and Maestro branded debit and consumer credit cards in the European Economic Area (EEA). The MIF is a charge levied on each payment at a retail outlet when the payment is processed. The Commission decided in December 2007 (see IP/07/1959 and MEMO/07/590) that the MIF that MasterCard charged at the time did not comply with EC Treaty rules on restrictive business practices (Article 81), but did not require MasterCard to repeal the MIF system altogether. Instead, the decision gave MasterCard six months (until 21 June 2008) to comply with the antitrust rules. Since the adoption of the decision MasterCard has failed to come forward with an alternative MIF that could be justified. Although MasterCard has now provisionally repealed its MIF, the Commission understands that MasterCard will continue to look for evidence to demonstrate the benefits of a MIF. The Commission will continue to work with MasterCard in analysing any evidence and data that it provides.

Competition Commissioner Neelie Kroes said: "Irrespective of MasterCard's move to temporarily repeal its cross-border MIF , the Commission will continue to be open to assess any new proposals from MasterCard concerning systems to ensure both efficient payments and a fair share of the benefits for consumers and retailers".

In the EU, over 23 billion payments, exceeding a value of €1350 billion, are made every year with payment cards.

The Commission's December 2007 decision (see IP/07/1959) found that MasterCard's MIF infringed Article 81(1) of the EC Treaty because it constituted a restrictive business practice that increased retailers' costs without leading to a more efficient outcome, and could not meet the exemption criteria under Article 81(3) because MasterCard had failed to show that its MIF benefited consumers and merchants.

During the six months since the Commission's decision, MasterCard has failed to come forward with an alternative MIF that meets the exemption criteria of contributing to technical or economic progress while allowing consumers a fair share of the resulting benefit. Failure to comply with the Commission's decision before 21 June 2008 would have meant that MasterCard risked daily penalty payments. MasterCard has therefore informed the Commission that it has chosen to temporarily repeal its cross-border MIF for consumer cards while it continues to search for a MIF for which MasterCard can demonstrate that the exemption criteria of Article 81(3) are met.


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