EU General Court Rejects Mastercard Appeal

On 24 May 2012, the General Court of the European Union delivered a judgment dismissing MasterCard's appeal against a European Commission decision of 2007 that found that MasterCard's multilateral interchange fees (MIFs) on cross-border transactions amounted to an anti-competitive business practice in breach of Article 101 TFEU (see VBB on Competition Law, Volume 2008, Nos 1 and 4, available at www.vbb.com).

MIFs are fees charged by a cardholder's bank (the card-issuing bank) to a merchant's bank for each transaction made with a card. The amount of the fee corresponds to a proportion of the price of the transaction and is retained by the card-issuing bank. In its decision, the Commission essentially argued that such fees prompt retailers to increase their prices in order to cover the cost of these fees. Furthermore, the Commission stated that MIFs had the effect of setting a floor under the costs charged to merchants and thus constituted a restriction of price