MasterCard loses battle against EU ban over Card Fees
MasterCard has lost the battle against an EU ban on its cross-border card fees at Europe's highest court on Thursday. The ruling has brought MasterCard under a broader regulatory, which puts a cap on the cost of using payment cards.
According to the EU's Court of Justice, the fees set by MasterCard had unfairly restricted competition and MasterCard was unsuccessful to show benefits of the fees to justify its system.
The decision applies only to MasterCard and retailers must pay the cross-border interchange fees, when they accept credit and debit card transactions in Europe. This could motivate other regulators to take action and limit fees normally.
Lower court decision in 2012 upholding the European Commission's first findings against MasterCard in 2007 was correct, said the Court of Justice of the European Union (ECJ).
"The Court of Justice confirms the judgment 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 worlds' second-largest credit and debit card company after Visa faced strict regulation more than 10 years ago for its fees that act as a lucrative tool to generate income for the financial industry.
Following the Commission's 2007 veto, MasterCard since had made a deal with regulators to limit its fees for cross-border transactions within Europe at 0.2% for debit card and for credit cards at 0.3%.
Last year, MasterCard was inspected for the amount it charged people visiting Europe for card transactions.
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