As reported in our December 2018 newsletter, the Commission fined MasterCard over €570 million for limiting merchants from benefitting from better conditions offered by banks established elsewhere in the EU.[1]


By way of background, under the MasterCard scheme, banks offer card payment-related services. Issuing banks issue cards to cardholders and acquiring banks maintain merchants’ bank accounts. When a consumer uses a debit or credit card in a shop/online, the acquiring bank pays a processing fee to the issuing bank. This is referred to as an interchange fee. The acquiring bank passes the interchange fee on to the relevant merchant, and this fee is included in the final price for consumers.

Commission Decision

The Commission decision of January 22, 2019, concerned MasterCard’s obligation on acquiring banks to apply the interchange fee of the country in which the relevant merchant was located. This prevented merchants from shopping around for more competitive prices from acquiring banks located in lower interchange fee Member States. This in turn resulted in higher prices for merchants and consumers, limited cross-border competition, and artificially segmented the Single Market. The Commission found this to be a breach of EU competition law and fined MasterCard over €570 million. The Commission held that the infringement only ended when, in December 2015, MasterCard amended its rules as a result of the entry into force of the Interchange Fee Regulation, whereby interchange fees in the EEA were capped (and no longer  varied significantly from one Member State to another). MasterCard was granted a 10% fine reduction for cooperation with the Commission shortly after the Commission published a Fact Sheet on the reduction of fines for cooperation in non-cartel cases based on its experience in the Guess decision.[2] Both developments were reported in detail in our December 2018 newsletter.[3]

Wider Context

The fine against MasterCard is the latest in a string of antitrust investigations into card payment schemes at both EU and national level. These investigations largely revolved around Multilateral Interchange Fees (“MIFs”) paid by acquiring banks to issuing banks. MIFs constitute a default fee decided by the MasterCard scheme in the event that banks do not bilaterally negotiate an interchange fee. The Commission found that MIFs established a floor which acquiring banks could not compete away and, as a result, they  inflated  the merchant service charge payable by retailers to acquiring banks. The Commission found that this ultimately increased prices for all consumers and constituted a restriction of competition within the meaning of Article 101 of the Treaty on the Functioning of the European Union (“TFEU”).

[1]      MasterCard II (Case COMP/AT.40049), Commission decision of January 22, 2019.

[2]      Guess (Case COMP/AT.40428), Commission decision of December 17, 2018.

[3]      EU Competition Law Newsletter, December 2018.