Yahoo Finance Mastercard, rivals could be fined £32m for alleged 'cartel behaviour'
UK’s payment watchdog said Mastercard (MA) and two of its rivals have admitted liability for breaching competition rules and may have to pay fines totalling more than £32m ($44m) in a case related to pre-paid cards used by local authorities to distribute welfare payments.
In its provisional investigation, the Payment Systems Regulator (PSR) found that because of the alleged collusion, public bodies were limited in their choice of suppliers of pre-paid cards services, and potentially “deprived of lower prices and better quality for those services.”
Mastercard, along with allpay, APS, PFS and Sulion, “engaged in anti-competitive behaviour by agreeing not to compete or poach each other’s clients” and “broke the law by engaging in cartel behaviour,” the regulator said.
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In February 2021 Mastercard, Allpay and PFS agreed to settle with the regulator and admitted that they took part in the alleged anticompetitive arrangements.
The investigation is ongoing and the companies can make representations on the provisional findings, the regulator said.
Should it conclude that there have been infringements, the three have agreed to pay maximum fines.
Chris Hemsley, managing director of the Payment Systems Regulator said: “By colluding in this way, we consider the parties were acting as a cartel. Because of the reduced competition local authorities may have been missing out on an alternative supplier or products that were either cheaper or better suited to both their needs and the needs of those using the prepaid cards.
“Collusion in payments is absolutely unacceptable. Where we see it happening, we will take action, stop it, and seek to impose significant penalties.”
A spokesperson for Mastercard said the company "is committed to upholding all regulatory and legal standards... We have taken this issue, which was isolated to UK prepaid cards, very seriously and have put further controls and training in place to ensure it cannot occur again, while working with the PSR to settle this matter at the earliest possible opportunity.”
Meanwhile, Allpay said: "We informed the PSR immediately after we became aware of potential breaches of competition law involving a number of organisations."
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