Mastercard loses EU court battle over cross-border fees

Reuters News
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Posted: Sep 11, 2014 4:04 AM

By Foo Yun Chee

LUXEMBOURG (Reuters) - MasterCard lost its challenge at Europe's highest court on Thursday against an EU ban on its cross-border card fees, a ruling that supports a broader regulatory drive to cut the cost of using payment cards.

While the decision applies only to MasterCard and the cross-border interchange fees retailers must pay when they accept credit and debit card transactions in Europe, it could encourage other regulators to take action and cap fees generally.

The Court of Justice of the European Union (ECJ) said a lower court verdict in 2012 upholding the European Commission's initial finding against MasterCard in 2007 was correct.

"The Court of Justice confirms the judgement of the General Court and thus validates the Commission's decision prohibiting the multilateral interchange fees applied by MasterCard," judges wrote in their ruling on Thursday.

The world's second-largest credit and debit card company after Visa came under regulatory fire more than a decade ago for its fees, which are a lucrative source of revenue for the financial industry.

Following the Commission's 2007 veto, MasterCard has since reached a deal with regulators to cap its fees for cross-border transactions within Europe at 0.2 percent for debit card and credit cards at 0.3 percent.

The case is C-382/12 MasterCard versus the Commission.

(Reporting by Foo Yun Chee; editing by David Clarke)