EC Says Visa Europe Credit Card Interchange Fees Anti-competitive

The European Commission (EC) has ruled that cross-border credit card interchange fees imposed by Visa Europe restrict competition between banks and infringe antitrust rules.

Its complaint marks the latest chapter in Brussels’s on-going campaign against what it regards as inflated charges to retailers on credit card transactions. Joaquín Almunia, the EU’s competition commissioner, served the card payments group with an updated ‘statement of objections’ after its refusal to voluntarily halve its credit card fees. Visa agreed in late 2010 to reduce its multilateral interchange fees (MIFs) for debit cards, but resisted doing the same for credit cards.

In May 2012 an EU court rejected Visa rival MasterCard’s challenge against an EC ruling that the firm’s cross-border interchange fees for both credit and debit cards violated competition law.

In a supplementary statement on its latest ruling, the EC said its preliminary view is that Visa’s MIFs for consumer credit cards violate its rules, which are aimed at preventing cartels and restrictive business practices. It believes that MIFs “harm competition between acquiring banks, inflate the cost of payment card acceptance for merchants and ultimately increase consumer prices”.

It also doubted whether MIFs are “necessary to create efficiencies that benefit merchants and consumers” and could therefore be entitled to an exception from the rules”.

Visa Europe’s chief executive officer (CEO), Peter Ayliffe, said: “We are very disappointed that the Commission has taken such a confrontational approach and was not willing to find a solution to support investment and innovation in European payments for the benefit of European consumers and to allow European payments to compete globally.”

Visa now has the option of making a written reply or requesting a hearing on the issue, which could result in fines of up to 10% of turnover being imposed for antitrust breaches.

Last month, Visa, MasterCard and 13 banks agreed to a
US$7.25bn antitrust settlement
, the largest in US history.


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