BRUSSELS, BELGIUM – Yesterday, Europe's top court backed a decision by the European Commission to ban cross-border fees set by MasterCard Inc. on the grounds that they harmed competition.

In its ruling, the Luxembourg-based European Court of Justice upheld a 2007 decision by the European Commission — the European Union's executive arm —that MasterCard's multilateral interchange fees on cross-border transactions breached competition rules.

In response to yesterday’s ruling, the Merchants Payments Coalition (MPC) issued the following statement: “Today’s court decision marks a big win for European consumers as it opens the way for a more transparent and competitive credit card market.  With the ruling, the European Union is one step closer to successfully transforming the current fee system and protecting both their retail economies and consumers. …

“This ruling should spur policymakers in the United States to take a closer look at these exorbitant and escalating credit card fees.  Currently, merchants and consumers in the U.S. pay the highest swipe fees in the world — up to four percent per transaction.  The fees are seven times higher than the standard European rates and cost more than all credit card annual fees, cash advance fees, over-the-limit fees and late fees combined.”

Thursday's ruling comes as the EU prepares to place a cap on all interchange fees of 0.3% of the value of a credit-card transaction, and 0.2% or €0.07 ($0.09), whichever is lower, for a debit-card transaction. EU lawmakers voted in April to impose the cap but the regulation must still be approved by EU member states before becoming law.