SME Chamber

European Court vindicates ban on anti-competitive card fees

 The European Court has upheld the Commission's 2007 decision on MasterCard, ruling that the MIF set ‘a floor under the costs charged to merchants and thus constituted a restriction of price competition that was to their detriment.'


EuroCommerce, the European Retail Round Table (ERRT) and GRTU applaud this excellent ruling. EuroCommerce Director-General Christian Verschueren said, "We are delighted with this decision, which wholly vindicates retail's ten-year campaign against these anti-competitive fees. We now call on the Commission to follow this up with radical and decisive regulatory solutions to make payments in Europe truly competitive."

We commend the court on its unequivocal rulings on the economic basis of the multilateral interchange fee (MIF): these clearly show that the court upholds the Commission's view on the anti-competitive nature of the MIF. The retail sector has long argued that the MIF is an unseen and non-negotiable burden for merchants and the Commission's own figures show that card transactions cost EU merchants €25 billion per year.

Dennis Kredler, Director-General of the European Retail Round Table (ERRT) added, "This ruling is excellent news. We now need a robust methodology to regulate how the costs for payment card services are calculated and allocated. The Green Paper on mobile card and internet payments is an excellent opportunity to establish an obligation on card companies to offer a basic payment service."

What happens next?

The Court's judgment means that the MasterCard cross-border MIF is contrary to EU competition law and must be removed. We also trust that the national competition authorities will now follow the European Court's lead. However, a long-term business model must still be found, through regulatory measures already begun by the Commission Green Paper on Payments. We urge the Commission to tackle the business model issue head-on; solving the associated issues of cross-border acquiring, the honour all cards rule (HACR) and transparency would be simply not enough. We call on the Commission to implement the basic payment service model.

Basic payment service

The MIF burdens the retail sector with the excessive cost of bundled services from which the merchant does not benefit. We therefore advocate the stripping away of all these extra services and the creation, by regulation, of a mandatory basic payment service. This service, which should exist on each and every SEPA payment card, would offer consumers and merchants the facility to make a payment, which would carry a fee for the service but would not have a MIF. In short, we advocate the unbundling of the basic payment operation from all other additional services which may be offered by a payment scheme.


In 1997, EuroCommerce lodged complaints with the European Commission against EuroPay (now part of MasterCard Incorporated) and Visa. Ten years later the European Commission issued a decision which confirmed that: 1) MasterCard's MIF, in effect, sets a minimum price that merchants must pay to their acquiring bank, and therefore infringes Article 101(1) of the Treaty of the European Union and 2) MasterCard failed to show that the conditions (in essence efficiency) of Article 101 (3), which give exemption from the Article 101 prohibition, were satisfied. In 2007, the Commission ruled that MasterCard's MIF was in breach of European competition law and ordered the card scheme to remove it. As a consequence, MasterCard set its cross-border MIF to zero in 2008, but appealed the Commission decision. The European Court has now rejected that appeal and upheld the Commission decision. MasterCard can still appeal to the higher court on a point of law.

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