[DEBATE] : EU abandons anti-trust case against MasterCard

[Riaz K Tayob]

EU abandons anti-trust case against MasterCard
+ -
08:50, April 02, 2009
The European Commission abandoned its anti-trust case against U.S. 
company MasterCard over its transaction fees on Wednesday.

"MasterCard has also agreed to introduce certain changes to its system 
that increase transparency and efficiency in the payment cards markets," 
EU commissioner for competition affairs Neelie Kroes told a press briefing.

MasterCard cuts its Multilateral Interchange Fees (MIF) transaction fees 
to 0.2 percent to 0.3 percent as of July 2009.

"With the changes I have just mentioned, and assuming these commitments 
are kept, I see no further need to pursue MasterCard for infringing the 
antitrust rules," she said.

"We will be monitoring implementation closely in coming months," Kroes 
said, adding that an investigation into MasterCard's competitor Visa 
Europe's fee structure was under way.

The European Commission, the executive arm of the EU, ruled in December 
2007 that MasterCard's MIF levied on retailers breached EU antitrust 
law, demanding changes within six months.

But MasterCard rejected the decision and appealed in March 2008to the 
European Court of First Instance (CFI). 　

Source:Xinhua

http://english.people.com.cn/90001/90777/90856/6627890.html



MasterCard cuts transaction fees under threat of EU fines

* David Gow in Brussels
* The Guardian, Thursday 2 April 2009
* Article history

European consumers stand to benefit from lower credit card transaction 
fees when shopping in other EU countries after yesterday's decision by 
the European commission to drop legal action against MasterCard.

The world's second-largest provider of credit and debit cards has agreed 
to slash its so-called multilateral interchange fees (MIF) for 
cross-border payments and repeal other "membership" fee increases in 
exchange for lifting threatened fines.

But the company made it clear that its cuts were only temporary, pending 
its appeal to Europe's highest court, and some retailers condemned the 
"appalling" move as a "weak compromise".

Hailing the decision, Neelie Kroes, the EU competition commissioner, 
said: "This will mean lower charges for retailers accepting payment 
cards, which should in turn be passed on to consumers."

She indicated that other providers of credit and debit cards, such as 
Visa, should follow suit - and warned the biggest provider that she 
would continue to investigate its business practices.

"I have no intention that today's announcement will allow Visa to 
benefit at the expense of MasterCard," Kroes told reporters. "We are 
determined to keep a level playing field in these markets." Visa claimed 
it had cut its fees to an average of 0.61% per transaction and 
reiterated its call for a negotiated settlement.

But Xavier Durieu, head of the retail lobby EuroCommerce, said a fixed 
fee of just €0.01 to €0.05 (1-5p) would still be profitable for issuing 
banks. The British Retail Consortium welcomed the move to cut so-called 
membership fees, saying it would save £15m a year for UK banks.

Kroes insisted that the decision sent a signal to the entire European 
banking sector that it must be more efficient and lower costs for 
merchants and consumers as a way out of the economic crisis.

She said: "According to MasterCard, these [new] rates will become the 
lowest MIF rates in the world. This is proof of the benefits of strong 
competition policy for the European economy."

The liberal Dutch commissioner sees her 15-month battle with MasterCard 
and ongoing dispute with Visa as part of the EC's pro-consumer campaign 
to boost the single market and wider economy through cheaper fees.

MasterCard has agreed to cut the average MIF charged to retailers and 
their banks to 0.30% for credit card transactions and 0.20% for its 
Maestro debit cards. This compares with the previous 0.90-1.90% and 
0.40-0.75% respectively.

Kroes sees the decision as "the next step" in Europe's transition from 
cash to plastic money in a market that is already worth several trillion 
euros a year and set to expand via online shopping. The MIF, her aides 
said, amount to €12bn a year for national and cross-border transactions. 
The latter is worth €600m, with MasterCard accounting for some €200m of 
that.

http://www.guardian.co.uk/money/2009/apr/02/master-card-fees