BRUSSELS – The European Union (EU) levied a $648.2 million fine on Mastercard, charging the financial firm with hiking card payment costs inside the EU, the Wall Street Journal reports. On Tuesday, the European Commission said Mastercard did not allow merchants to shop “around for better conditions offered by [other] banks,” which it claimed triggered higher prices for consumers and retailers, as well as checked cross-border competition.
Within the EU, interchange fees for using a credit or debit card varies. In December, Mastercard indicated it anticipated the amount of the fine, and noted that closing this issue is “an important milestone for the company.”
The EU formally began investigating Mastercard in 2013. The EU complaints stemmed from the financial firm’s actions prior to December 2015, when European interchange fees were capped by legislation.
“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,” said Margrethe Vestager, competition chief for the European Union.
In the United States, Mastercard and Visa, along with other credit card companies, came to a $6.2 billion settlement with retailers over swipe fees in September 2018.