Mastercard Faces European Commission Fee Probe

The US card giant has disclosed in its quarterly report that it is cooperating with the European Commission on an antitrust investigation. 

Mastercard’s report says that it received “a formal request for information” from the European Commission in August this year, seeking documents and information in connection with an investigation into alleged anti-competitive behaviour by certain card scheme services in the European Union and European Economic Area. 

According to the document, the request “focuses on Mastercard’s practices regarding network fees related to acquirers”. 

“Mastercard is cooperating with the European Commission in connection with the request,” the company says in the report.

The European Commission has acknowledged that it is conducting an investigation into Mastercard’s card fees. 

“We can confirm the sending of the request for information,” a spokesperson for the commission told Vixio, adding: “We have no further comment to make, as the investigation is ongoing.”

Fees and competition

The nature of the probe shows that the commission is looking beyond its Interchange Fee Regulation (IFR) to other fees being charged by the international card schemes.

This approach reflects what the UK’s Payment Systems Regulator (PSR) has been considering in its own review of the card acquirers’ operations. 

In May, the PSR provisionally concluded that there is insufficient competition among card schemes in the UK, particularly concerning the scheme and processing services provided to acquirers. 

According to the UK regulator’s interim report, Mastercard and Visa dominate the market, enabling them to raise prices without effective competition to restrain them. 

This lack of competition, compounded by a complex pricing structure, has led to a significant rise in fees, with scheme and processing fees increasing by more than 30 percent in the past five years, without corresponding improvements in service quality, the regulator said.

Mastercard’s filing also mentions a March 2023 regulator enforcement, stating that it had received a civil investigative demand (CID) from the US Department of Justice (DOJ) antitrust division seeking documents and information regarding a potential violation of Sections 1 or 2 of the Sherman Act. 

“The CID focuses on Mastercard’s U.S. debit program and competition with other payment networks and technologies. Mastercard is cooperating with the DOJ in connection with the CID,” the company said.