The Commission has opened formal proceedings to investigate whether MasterCard may be hindering competition in the European Economic Area (EEA) with regard to payment cards, in breach of EU antitrust rules. In addition to its antitrust enforcement action, the Commission intends to propose before the summer a regulation on inter-bank fees for card payments that will ensure legal certainty and a durable level playing field across the EU for all providers.
The Commission has concerns that some of MasterCard’s inter-bank fees and related practices may be anti-competitive. An opening of proceedings does not prejudge the outcome of the investigation.
Payment cards are of crucial importance across the EU internal market, in particular for purchases across borders or over the internet. European consumers and businesses are making more than 40% of their non-cash payments per year by card. It is therefore a priority for the European Commission to prevent competition distortions in inter-bank arrangements on fees and other conditions. In 2007, the Commission already prohibited some of MasterCard’s inter-bank fees and the Commission is currently investigating Visa.
The Commission has now opened an in-depth investigation into:
(i) inter-bank fees in relation to payments made by cardholders from non EEA countries – as opposed to fees for cross border transactions within the EEA that were already prohibited in 2007 (see IP/07/1959 and MEMO/07/590). Such fees apply for example when a US tourist uses his MasterCard credit card to make a purchase at a merchant in the EEA;
(ii) all rules on ‘cross-border acquiring’ in the MasterCard system that limit the possibility for a merchant to benefit from better conditions offered by banks established elsewhere in the internal market and
(iii) related business rules or practices of MasterCard which amplify the Commission’s competition concerns (like the „honour all cards rule” which obliges a merchant to accept all types of MasterCard cards).
These fees and practices may restrict competition. The inter-bank fees are generally passed on to the merchants, leading to higher overall fees for them. Ultimately, such behaviour is liable to slow down cross-border business and harm EU consumers.
MasterCard says that it „intends to fully cooperate with the Commission. As a global electronic payments company, MasterCard always aims to balance the interests of both consumers and retailers to ensure that each party pays its fair share of the costs for the benefits it receives.”
In 2007, the Commission prohibited MasterCard’s cross-border inter-bank fees within the EEA (see IP/07/1959 and MEMO/07/590). In May 2012, the General Court rejected MasterCard’s appeal against that decision (see MEMO/12/377 and case T-111/08). MasterCard has appealed the judgment.
In parallel, the Commission is also investigating similar practices by Visa (see IP/12/871).
The Commission favours a level playing field between payment card providers. This is why the investigations relating to the two major providers – MasterCard and Visa – are running in parallel. Looking beyond MasterCard and Visa, the Commission has announced its intention to propose legislation on inter-bank fees for payment cards before the summer. Once adopted by the Council and the European Parliament, such rules should provide legal certainty and a level playing field for all providers.
Article 101 of the TFEU prohibits anticompetitive agreements and decisions of associations of undertakings. The implementation of this provision is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can be applied by the Commission and by the national competition authorities of EU Member States.
Article 11(6) of the Antitrust Regulation provides that the initiation of proceedings by the Commission relieves the competition authorities of the Member States of their competence to also apply EU competition rules to the practices concerned. Article 16(1) of the same Regulation provides that national courts must avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated.
The Commission has informed MasterCard and the competition authorities of the Member States that it has opened proceedings in this case. There is no legal deadline to complete inquiries into anti-competitive conduct. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertaking concerned cooperates with the Commission and the exercise of the rights of defence.
„Tendinţele pe care le-am remarcat înainte de începerea pandemiei s-au accelerat pe perioada stării de urgenţă. Am văzut acest lucru ca o oportunitate, un tipping point pentru bancă. Post-pandemie nu avem cum sa ne întoarcem la comportamentul financiar pe care îl aveam până în februarie a.c. Relaţia românilor cu online-ul s-a schimbat. In plus, cardul fizic se va dematerializa. Vom asista la o scădere a cererii pentru cardurile fizice, respectiv la o creştere a preferinţei pentru componenta digitală a acestora.”