EU fines Mastercard €570m for breaking competition laws

The EU has fined Mastercard €570m (£502m) for blocking merchants from seeking better conditions operating in other parts of the bloc’s single market.

The European Commission opened an investigation into the financial service in 2013 to assess whether its rules, which required banks to apply the interchange fees of the country where a given retailer was based, were in breach of EU competition laws.

In the past, interchange fees varied considerably between the different countries in the European Economic Area (EEA), and Mastercard’s rules meant companies could not benefit from lower costs in other states.

The commission investigation found that because of Mastercard’s cross-border acquiring rules, retailers paid more in bank services to receive card payments than if they had been free to shop around for lower-priced services.

This led to higher prices for retailers and consumers, to limited cross-border competition and to an artificial segmentation of the single market, the commission said.

Margrethe Vestager, the European commissioner for competition, said: “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.”

Mastercard was granted a 10 per cent fine reduction for cooperating with the commission.

A spokesperson for the company 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.

“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.”