Antitrust: Commission accepts commitments by Mastercard and Visa to cut inter-regional interchange fees

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The European Commission has made commitments offered by Mastercard and Visa legally binding under EU antitrust rules. The companies will significantly reduce (on average by around 40%) their multilateral interchange fees for payments in the European Economic Area (EEA) with consumer cards issued elsewhere. The Commission outlined its competition concerns related to inter-regional MIFs in a Statement of Objections addressed to Mastercard on 9 July 2015 and a Supplementary Statement of Objections addressed to Visa on 3 August 2017. In particular, the Commission was concerned that inter-regional interchange fees (also referred to as “inter-regional MIFs”) may anti-competitively increase prices for European retailers accepting payments from cards issued outside the European Economic Area (EEA) and in turn lead to higher prices for consumer goods and services in the EEA. Mastercard and Visa, each separately, offered commitments that would reduce the inter-regional MIFs by an average of 40%. The commitments, which will apply for five years and six months, cover inter-regional interchange fees applied to payments made with the Mastercard, Maestro, Visa, Visa Electron and V-PAY credit and debit card brands. In December 2018, the Commission consulted market participants to verify the appropriateness of the proposed commitments. In light of the Commission’s analysis and the results of the market test, the Commission is satisfied that the commitments offered by Mastercard and Visa address its concerns.  The Commission is the first competition authority in the world to intervene on inter-regional MIFs. Commissioner Margrethe Vestager, in charge of competition policy, said: “Mastercard and Visa have committed to significantly reduce the interchange fees applied to payments made in Europe with cards issued elsewhere. The commitments, which are now binding on Visa and Mastercard, will reduce the costs borne by retailers for accepting payments with cards issued outside the EEA. This, together with our January 2019 decision on Mastercard’s cross-border card payment services, will lead to lower prices for European retailers to do business, ultimately to the benefit of all consumers”. 

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