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European Court of Justice orders MasterCard to repeal multilateral fallback interchange fees

MasterCard Inc. & Ors v Commission (C-382/12)

Related Member(s):
Rhodri Thompson QC
Related Practice Area(s):
Competition and Regulation, Commercial Law, EU Law
Court:

The Court of Justice dismissed the appeals brought against the General Court judgment in MasterCard Inc v European Commission (T-111/08) and thus validated the Commission’s decision prohibiting the multilateral interchange fees applied by MasterCard to cross-border transactions carried out by debit or credit card, bearing the MasterCard or Maestro logo, within the European Economic Area

The European Court of Justice considered an appeal and cross-appeals brought against the General Court judgment in MasterCard Inc v European Commission (T-111/08), by which the General Court dimissed an action seeking annulment of Decision C(2007) 6474 final, concerning intra-European Economic Area multilateral fallback interchange fees (“MIF”) applied by MasterCard to cross-border transactions carried out by debit or credit card, bearing the MasterCard or Maestro logo, within the European Economic Area. The appellant asked the court to set aside the contested judgment and annul Decision C(2007) 6474 final. By that decision, the Commission had declared the MIF fees, which corresponded to a proportion of the price of a payment card transaction that was retained by the card-issuing bank, to be contrary to EU competition law. The cost of the MIF was charged to merchants in the more general context of the costs which they are charged for the use of payment cards by the financial institution which handled their transactions. The Commission found that the MIF had the effect of setting a floor under the costs charged to merchants and thus constituted a restriction of price competition. The Commission also noted that it had not been demonstrated that the MIF could generate efficiencies capable of justifying their restrictive effect on competition. The Commission therefore ordered MasterCard and the companies representing it to bring the infringement to an end by formally repealing the MIF within six months.

Held: Appeal dismissed, cross-appeal dismissed.

Rhodri Thompson QC was involved in this case.