The European Commission (EC) today announced that it has opened formal proceedings to investigate whether MasterCard may be hindering competition in the European Economic Area (EEA) with regard to payment cards and is thus in breach of EU antitrust regulations.

The news was first reported by Reuters.

The EC is concerned that some of MasterCard’s inter-bank fees and related practices may be anti-competitive. It fears that the payment giant’s behaviour may slow down cross-border business and, ultimately, harm EU consumers.

There is no legal deadline to complete inquiries into anti-competitive conduct.

In 2007, the Commission already prohibited some of MasterCard’s inter-bank fees, and it is currently also investigating its chief rival, Visa.

The EC explains why it has now opened an in-depth investigation into MasterCard’s card fees:

Payment cards are of crucial importance across the EU internal market, in particular for purchases across borders or over the internet. European consumers and businesses are making more than 40% of their non-cash payments per year by card.

It is therefore a priority for the European Commission to prevent competition distortions in inter-bank arrangements on fees and other conditions.

The EC says it will, among other things, look into inter-bank fees related to payments made by cardholders from non-EEA countries – as opposed to fees for cross border transactions within the EEA that were already prohibited in 2007.

Such fees apply for example when a US tourist uses his MasterCard credit card to make a purchase at a merchant in the EEA.

In addition to its antitrust enforcement action, the EC says it aims to propose a regulation on inter-bank fees for card payments before the summer.

Once adopted by the Council and the European Parliament, the idea is that the rules will “ensure legal certainty and a durable level playing field across the EU for all providers”.

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