The European Commission has imposed a fine amounting to €570.6 million (£501.2 million) on Mastercard. It says that the card company limited the ability of banks to shop around for lower fee structures among the member states of the bloc.
In a statement that was released today, Margrethe Vestager, the competition commissioner of the European Union, stated: “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 charges a so-called interchange fee on all transactions that are made between two banks using one of its cards. The charge is said to cover the costs of handling, fraud, and the risk that is associated with the payment.
The rate that Mastercard could charge banks varied among the 28 member states of the bloc until the European Union imposed a bloc-wide cap on interchange fees in 2015. It is currently set at a maximum of 0.3 percent of the value of each transaction, depending on whether it involves a debit or credit card.
The fine was lessened by 10 percent since Mastercard agreed to co-operate with the inquiry.
Mastercard said that the fine would be taken as a charge in the fourth quarter of the previous year, the effect of which will be revealed in its full-year results that are set to be announced next week.
The card-issuer said that the closure of the investigation placed to bed a legacy dispute for the company. It said that it was considered an important milestone in the history of the card company.
In a statement, the company stated: “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.”