European Court of Justice upholds ruling on anti-competitive Mastercard fees

An EU probe to examine Mastercard fees culminated in a landmark judgment by the European Court of Justice (ECJ) yesterday. The decision ends MasterCard's seven-year battle against a decision made by the EU's competition watchdog over charges to retailers for credit and debit card transactions outside the originating country.

The court held that regulators were right to condemn the cost of the so- called interchange fees and has rejected an appeal.

The judgment is expected to influence other national competition law proceedings in the EU, which were paused pending the ECJ decision. The court rules on points of EU law, clarifying its interpretation to other courts.

However, MasterCard will not be fined by the EU as a result of today’s judgment, as the Commission had been notified by the company of its practices in 1992. According to EU competition law in force at that time, businesses notifying the executive would not be fined.

The ruling came as the EU prepares to place a cap on all such cross-border fees and may well influence the ongoing process to regulate multi-interchange fees (MIFs) at EU level. Amendments to the revised Payment Services Directive deal with interchange fee regulation and were drafted in response to the General Court’s judgment against MasterCard in 2012 and confirmed by today’s ruling. The amendment is expected to be adopted by 2015 with caps entering into force in 2016. 

Javier Perez, president of MasterCard Europe, said the ruling was disappointing, adding that the ruling would have "little or no impact on how MasterCard operates".

"We will continue to comply with the decision as we have been doing for a number of years. This means we would maintain our European... cross-border consumer interchange fees at a weighted average of 0.2% for debit and 0.3% for credit."