Mastercard lost a challenge to an EU ban on its cross-border card fees in a ruling that puts rival Visa Europe squarely in the sights of European regulators over its charges. Europe's second-highest court on Thursday upheld a 2007 decision by the European Commission which was triggered by retailers' gripes about the world's second-largest credit and debit card network.
The EU competition watchdog said at the time that the network's cross-border multilateral interchange fee (MIF), levied on retailers' credit and debit card transactions, breached EU antitrust rules and had to be changed. The EU ban is part of the EU executive's strategy to break down barriers to e-commerce and cut costs for businesses in the 27-member European Union.
"The General Court confirms the Commission's decision prohibiting the multilateral interchange fees applied by Mastercard," judges at the Luxembourg-based court ruled. MasterCard President Javier Perez said the company would appeal but would also continue to levy fees agreed with the Commission in a 2009 settlement, pending discussions with the regulator on the next step.
"We will apply 20/30, which is the level we have today, until further notice," Perez said, referring to the 0.20 percent charge for debit cards and 0.30 percent for credit cards as part of the settlement. MasterCard had said at the time of the settlement that the fees, halved from their previous level, were temporary, pending the court ruling. Appeals to the EU Court of Justice are limited to points of law.
EU Competition Commissioner Joaquin Almunia welcomed the ruling and called on Visa Europe, the European licensee of Visa Inc and Europe's largest card network, to fall into line. "The Commission invites Visa and MasterCard to consider carefully how to bring the multilateral interchange fees in the EU in line with competition," Almunia said in a statement.
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