EU General Court upholds European Commission’s decision prohibiting the multilateral interchange fees applied by MasterCard

25/05/12

By decision of 19 December 2007 the European Commission declared the multilateral interchange fees (the MIF) applied under the MasterCard card payment system to be contrary to Article 101 TFEU. 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 that was to their detriment. The Commission also took the view that it had not been demonstrated that the MIF could generate efficiencies capable of justifying its restrictive effect on competition.

MasterCard's application in Case T-111/08 to annul the Commission decision was dismissed by the EU General Court in a judgment handed down on 24 May 2012.

The General Court held that the MIF was not objectively necessary to operate the MasterCard payment system and that the Commission was legitimately entitled to conclude that, without the MIF, merchants would be able to exert greater competitive pressure on the amount of the costs they are charged for the use of payment cards. The General Court rejected MasterCard's argument that the arrangements satisfied the exemption criteria under Article 101(3) TFEU. The General Court also rejected an argument that MasterCard Inc's initial public offering on the New York Stock Exchange in 2006 had taken the arrangements outside the scope of Article 101 TFEU.

The judgment is here.