While the court’s decision applies only to MasterCard and the cross-border interchange fees retailers must pay when they accept credit and debit card transactions in Europe, it could encourage other regulators to take action and cap fees generally.
Since the Commission’s 2007 veto, MasterCard has reached a deal with regulators to cap fees for cross-border transactions within Europe at 0.2% for debit cards and 0.3% for credit cards.
Every time a consumer makes a card purchase, the cardholder’s bank charges an interchange fee to the retailer’s bank. The commission has argued that the current fee system is anticompetitive and artificially increases prices for consumers. By letting banks charge higher fees, credit-card companies give them an incentive to issue their cards rather than those of competitors.
The ruling should spur European lawmakers and governments to agree to a commission-proposed cap on credit and debit fees throughout the EU. The court verdict could also prompt Britain’s Competition and Markets Authority to revive its examination of fees charged by MasterCard and Visa Europe for domestic card payments.
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