On January 22, 2019, the European Commission fined Mastercard €570 million on the assumption that its card scheme limited the possibility for merchants to benefit from better conditions offered by banks established elsewhere in the Single Market in contrast with the European competition rules.
Mastercard offers a bank card scheme in the European Economic Area (EEA) and it acts as a platform through which issuing banks provide cardholders with payment cards, ensure the completion of the card payment transaction and transfer funds to the retailer’s bank. When a consumer uses a debit or credit card in a shop or online, the bank of the retailer (the “acquiring bank”) pays a fee called an “interchange fee” to the cardholder’s bank (the “issuing bank”). The acquiring bank passes this fee on to the retailer who includes it in the final prices for all consumers, even those who do not use cards.
Mastercard’s rules obliged acquiring banks to apply the interchange fees of the country where the retailer was located and retailers in high-interchange fee countries could not benefit from lower interchange fees offered by an acquiring bank located in another Member State.
In April 2013, the Commission opened a formal antitrust investigation against Mastercard to assess whether the rules on cross-border acquiring were in breach of EU antitrust rules. The Commission investigation found that those rules led to higher prices for retailers and consumers limiting cross-border competition in the Single Market. The infringement ended when Mastercard amended those rules in view of the entry into force of the Interchange Fee Regulation in December 2015, which capped interchange fees in the EEA to a maximum of 0.2% of the transaction’s value for debit cards and 0.3% of the transaction’s value for credit cards.