Mastercard hit with monster fine over monopoly scandal

The regulator said Mastercard had be admonished for preventing retailers from utilising cheaper banking services outwith their home country.

Mastercard levies a so-called interchange fee on transactions between the cardholder’s bank and the retailer’s bank. Historically, the rates varied considerably between member states but in December 2015 the EU passed a regulation capping the cost and levelling the playing field within the bloc.

It was established that prior to 2015, Mastercard obliged banks receiving card payments to use a fee set in their home country, even if cheaper rates were available elsewhere in the European Union.

Mastercard said the closure of the case was an important milestone.

Commissioner Margrethe Vestager said: “European consumers use payment cards every day, when they buy food or clothes or make purchases online.

“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.”

Mastercard is the second biggest supplier of credit card services in the European market.

The fine was reduced by 10 per cent to reflect Mastercard’s co-operation with the investigation.

Mastercard said: “Today’s decision by the European Commission puts an end to a legacy investigation concerning Mastercard’s European central acquiring rules that [had been] in place until 2015.” It added: “This decision relates to historic practices only, covers a limited period of time of less than two years and will not require any modification of Mastercard’s current business practices.”

The company can appeal against Tuesday’s decision in the European courts.