Mastercard fee found to infringe UK and EU competition law

On 6 September 2005, the OFT decided that the fee charged by banks issuing Mastercards and paid by the bank of the retailer accepting a Mastercard payment (the "multilateral interchange fee" or "MIF") infringes both the UK and the EC prohibition on restrictive agreements (Chapter I prohibition of the Competition Act 1998 and Article 81 EC Treaty). The decision finds that the MIF restricted competition both within the Mastercard scheme and with other payment schemes. The decision covers transactions using UK-issued Mastercard credit and charge cards from 1 March 2000 to 18 November 2004.

Most major banks in the UK which issue Mastercards have to date agreed collectively on the level of the MIF, rather than individually entering into agreements with Mastercard to determine the level of the fee. While the OFT recognised that a collective agreement was preferable due to the difficulty and cost involved in each bank coming to an individual agreement with Mastercard, it found that the MIF