The General Court in Luxembourg Thursday upheld a 2007 European Commission ban on MasterCard Europe's cross-border multilateral interchange fees levied on retailers' debit and credit card transactions. Its decision could have consequences for the U.S.
The court appears to be challenging not just the level of MasterCard's interchange fees but the very concept of such fees, London-based Celent senior analyst Zilvinas Bareisis tells PaymentsSource. The court rejected arguments that the fees are necessary to MasterCard's operation.
"There is a big difference between arguing for a reduction in fees and for a change in approach in how such fees should be calculated, and banning them altogether," says Bareisis in an email. "MasterCard is appealing, but if such a ruling were to be upheld, it would have profound consequences on card systems not just in Europe, but elsewhere."
The commission said in 2007 that the fees violate the European Union's antitrust rules. MasterCard challenged the ban in 2008 with the support of a few of Europe's largest banks. In 2009, MasterCard agreed to halve the pre-ruling fees.
In early 2012, the EU Competition Commission stated it would investigate similar charges against Visa Europe and said Thursday it was looking into Visa Europe's credit card fees, according to a Reuters article (
"Visa Europe has consistently said that it would like to reach a commercially acceptable agreement on an appropriate methodology for setting credit and deferred debit interchange in the interests of all stakeholders in the payments industry," Visa Europe spokeswoman Amanda Kamin told Reuters.
