Following an ongoing investigation into the effects of rules applying to fees, the EU has fined Mastercard for breaching EU competition laws. The fine of €570m has been issued to the company, after banning merchants from operating in other parts of the EU, which offer them more competitive conditions.
The Commission has been investigating financial services since 2013. The current rules require banks and other financial services firms to apply fees in the country the retailer is based in. However, it was argued that this could be breaching competition laws, as fees vary greatly between different member states.
Mastercard’s rules meant that companies weren’t able to benefit from lower rates, fees, and conditions elsewhere in the EU, or the EEA. In some cases, this meant that retailers paid more than they would have done if they were able to switch to other countries within the single market, which has damaged their ability to compete and resulted in higher prices for consumers, as well as less profit for the seller.
According to the competition commissioner, Margrethe Vestager, who noted in an interview: “European consumers use payment cards every day, when they buy food or clothes or make purchases online. By preventing merchants from shopping around for better conditions offered by banks in other member states, Mastercard’s rules artificially raised the costs of card payments, harming consumers and retailers in the EU.”
A spokesperson for Mastercard said: “Today’s decision by the European Commission puts an end to a legacy investigation concerning Mastercard’s European central acquiring rules that were in place until 2015. This decision relates to historic practices only, covers a limited period of time of less than two years and will not require any modification of Mastercard’s current business practices.”
They added: “Mastercard sees the closure of this anti-trust chapter as an important milestone for the company. Going forward, we will focus on what we do best: developing and delivering safe and seamless payment solutions that deliver real value for consumers, customers, retailers and governments alike.”
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