SME Chamber

Commission sends supplementary statement of objections to Visa

Credit cards:
Visa declined to give commitments on the rates for consumer credit cards and
only agreed to the 0.2% rate for debit. The SSO therefore takes the preliminary
view that Visa's credit card MIFs are contrary to competition law, following
the same arguments as those in the MasterCard case.

acquiring: the Commission's preliminary view is tha
Visa's rules on cross-border acquiring also breach the antitrust rules and stop
merchants benefiting from lower MIFs in other member states.

considers this is very good news, which we have been expecting for some time.
Following the judgement in MasterCard, we certainly anticipate a favourable

The European Commission has informed
Visa of additional concerns about possible violations of EU antitrust rules
concerning multilateral interchange fees (MIFs) set by Visa. The so-called
'supplementary statement of objections' (SSO) relates to MIFsset by Visa for
transactions with consumer credit cards in the European Economic Area (EEA).
MIFs are an important part of the total cost that retailers must pay for
accepting Visa's consumer payment cards and establish a minimum price for

The Commission's preliminary view is that
these MIFs restrict competition between banks and infringe EU antitrust rules
that prohibit cartels and restrictive business practices. At this stage, the
Commission also doubts that Visa's MIFs are necessary to create efficiencies
that benefit merchants and consumers and could therefore be entitled to an
exception from these rules. The sending of a supplementary statement of
objections does not prejudge the outcome of the investigation.

Today's SSO concerns all MIFs set
directly by Visa in the EEA for transactions with consumer credit cards. These
MIFs currently apply to all cross-border transactions in the EEA, as well as
to domestic transactions in eight EU Member States (Belgium, Hungary,
Ireland, Italy, Luxemburg, Malta, The Netherlands and Sweden). These inter-bank
fees are paid by merchants' banks (acquirers) to cardholders' banks (issuers)
for transactions with Visa's consumer credit cards.

The Commission has reached the
preliminary conclusion that MIFs reduce price competition between banks by creating
an important cost element common to all acquirers. The Commission considers
that Visa's MIFs harm competition between acquiring banks, inflate the cost of
payment card acceptance for merchants and ultimately increase consumer prices.
The Commission's analysis follows closely the judgment of the EU General Court
of May 2012 in the MasterCard case, which fully upheld the Commission's
findings in this respect.

Further, the Commission considers at
this stage that the MIFs' contribution to technical and economic progress,
which could justify an exemption under Article 101(3) of the Treaty on the
Functioning of the European Union (TFEU) has not been proven. Even if this were
the case, the Commission considers that the Visa MIFs are not set in a way that
would allow consumers to enjoy a fair share of such benefits.
Moreover, the actual Visa MIFs do not appear to be indispensable to
the attainment of the efficiencies claimed.

In addition, the Commission holds the
preliminary view that rules obliging cross-border acquirers to pay MIFs
applicable in the country of transaction hinder cross-border acquiring and
maintain the segmentation of national markets. The Commission considers that
this breaches EU antitrust rules and prevents merchants from benefiting from
lower MIFs in other Member States.


Visa's credit and debit cards represent
approximately 41% of all payment cards issued in the EEA. Visa has the largest
acceptance network within the EEA with over 5 million merchants accepting its
payment cards. In 2010 a total of 35 billion card payments were made in the
EEA, with a total value of €1800 billion.

Following the opening of proceedings in
March 2008, the Commission sent Visa in April 2009 a Statement of Objections
concerning multilateral interchange fees ("MIFs") for consumer debit
and credit card transactions. Visa Europe offered commitments to cap its debit
card MIFs at 0.20%, which the Commission made binding in December 2010. The
proceedings regarding consumer credit MIFs continued.

Article 101 of the Treaty on the
Functioning of the EU (TFEU) andArticle 53 of the EEA Agreement prohibit
cartels and restrictive business practices. Article 101(3) TFEU allows certain
practices to be exempted from this prohibition on condition that they improve
production or distribution or contribute to technical or economic progress,
provided that a fair share of the benefits are passed on to consumers, and that
the practices are proportionate and do not eliminate competition.



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