The European Commission has fined US payment system Mastercard €570 million ($648mn) for limiting the possibility for merchants to benefit from better conditions offered by banks established elsewhere across the EU.
“By preventing merchants from shopping around for better conditions offered by banks in other Member States, Mastercard’s rules artificially raised the costs of card payments, harming consumers and retailers in the EU,”Commissioner Margrethe Vestager said in a statement on Tuesday.
Brussels found that until December 2015 the payment system’s rules made acquiring banks apply the interchange fees of the country, where the retailer was located, instead of allowing them the benefit of lower interchange fees offered in another member of the 28-state bloc.
“This led to higher prices for retailers and consumers, to limited cross-border competition and to an artificial segmentation”of the market, according to the Commission’s investigation.
Mastercard, the second-largest payment system in the European Economic Area (EEA), in terms of consumer credit card issuing and value of transactions, acknowledged the infringements of EU competition rules and was granted a 10 percent fine reduction for cooperating with the investigation.
The fine is the latest step in line with the Commission’s policy to reduce card fees for European merchants.
Brussels opened the investigation into Mastercard in 2013, suspecting it of unfairly offsetting competition in the EEA, which is considered a breach of EU antitrust regulations. Last year, the payment system reportedly expected the fine to amount to more than $1.1 billion, but in December it set aside $650 million to cover the infringement.