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EU launches fresh probe into MasterCard

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(Globalpost/GlobalPost)

Already investigating credit-card giant Visa, the European Commission launched Tuesday a fresh anti-trust probe into its rival MasterCard over payment of inter-bank fees.

The Commission said it had concerns that some of MasterCard's "inter-bank fees and related practices may be anti-competitive," citing the need to ensure a level playing field in a huge and growing market.

In 2007, after an earlier probe, the Commission banned MasterCard from charging cross-border fees within the European Economic Area (EEA), which comprises the EU's 27 member states plus Norway, Liechtenstein and Iceland.

The new investigation will examine payments made by people from outside the EEA who use their credit cards when inside the regional grouping, giving as an example the case of a US tourist.

The Commission said payment cards are of "crucial importance" for the EU single market and so it was "a priority to prevent competition distortions in inter-bank arrangements on fees and other conditions."

As well as fees paid by cardholders from non-EEA countries, the probe will look at rules that limit merchant choice and oblige them to accept all types of the company's cards, even if some of them incur higher charges, it said.

"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."

The Commission added that it planned to submit a proposal by the middle of the year on such inter-bank fees "that will ensure legal certainty and a durable level playing field across the EU for all providers."

The opening of a formal investigation does not necessarily prejudge its outcome.

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http://www.globalpost.com/dispatch/news/afp/130409/eu-launches-fresh-probe-mastercard