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European Commission

MEMO

Brussels, 30 November 2012

Antitrust: Commission welcomes General Court judgment on tariff arrangements within Groupement des cartes bancaires

The European Commission welcomes yesterday's judgment by the EU General Court in case T-491/07-Groupement des cartes bancaires "CB". The judgment fully upholds the Commission decision finding that Groupement restricted competition with certain fees and tariffs which hindered the issuance of payment cards in France by new entrants, in breach of EU antitrust rules (see IP/07/1522 and MEMO/07/413). The ruling is important because it confirms the Commission's approach to payment card scheme arrangements that hinder competition in the EU.

The Groupement des Cartes Bancaires manages ‘CB’, the largest and most important payment card scheme in France. The Commission's 2007 decision found that the Groupement had restricted competition by imposing certain tariff measures on new members and a 'sleeper member fee' on members that had not developed significant bank card business since their adhesion. The Commission found that the measure shut out new entrants (retailers' banks, internet banks) from the market for the issuance of payment cards in France because even though they applied indistinctly to all members, they were applied in such a way as to hinder the issuing of cards by smaller banks who were prepared to offer cards at lower prices. The Commission concluded that the measures were anti-competitive by object and by effect, in breach of Article 101 of the Treaty on the Functioning of the European Union (TFEU).

Groupement argued that the tariff measures should not have been classified as a restriction 'by object' since they had the legitimate objective of combatting free riding. The General Court held that possible legitimate objectives do not prevent measures from restricting competition by their object; however they can be taken into account, when assessing whether a measure could be exempted from the general prohibition of restrictive business practices because it promotes innovation and allows to pass on a fair share of the benefits to consumers (Article 101 (3) TFEU).

Groupement had also argued that a distinction should be made between 'manifest' and 'non-manifest' restrictions of competition and that in case of 'non manifest restrictions' the economic and legal context should be examined further under Article 101 (1) TFEU. However, the General Court holds that the list of infringements in Article 101 TFEU is not exhaustive and that the distinction 'manifest' or 'non-manifest" should not change the assessment under Articles 101 (1) and 101 (3) TFEU.

The General Court also confirms that the Commission was right in defining the relevant market as the one for issuing payment cards in France.

This is the third judgment in eighteen months confirming the Commission's enforcement of competition rules in the payment card market: MasterCard on 24 May 2012 (see MEMO12/377) and Visa on 14 April 2011 (see Judgement of the General Court). On 3 October 2012 the Commission announced in the Single Market Act II that it intended to propose revisions to the Payment Services Directive and to propose legislation on interchange fees for card payments to enhance the effective functioning of payment markets.


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