Thursday, January 30 15:22:59
MasterCard's five-year battle to keep multi-billion-euro cross-border card fees was dealt a blow today when an adviser to Europe's top court backed efforts to reduce such charges.
The legal opinion follows a European Commission ruling that said MasterCard's cross-border "interchange" fees - levied on retailers' credit and debit card transactions - broke antitrust rules and had to be changed.
Mastercard challenged this but the court adviser's recommendation now means it is likely to fail.
The EU antitrust regulator says such fees cost businesses across Europe 10 billion euros ($13.64 billion) a year.
Many consumer rights campaigners argue these hidden costs, charged when banks process payments by, for example, a German visiting London, are passed on to the consumer.
"I propose that the court should dismiss the main appeal (by MasterCard) and the cross-appeals," Advocate General Paolo Mengozzi at the EU Court of Justice said in his opinion.
The court, which will issue its judgement in the coming months, follows such advice in the majority of cases.
The opinion represents a setback to the world's second-largest credit and debit-card company after Visa. Mastercard says such interference would actually lead to higher costs for consumers and encourage the black economy.
The advice may also bolster support for proposed European Union rules to cap charges on card payments that have yet to be approved by EU countries and the bloc's parliament.
That crackdown is part of the Commission's push to boost e-commerce in the 28-country bloc and reduce costs for business.
Interchange fees are collected and kept by banks processing payments using cards. While MasterCard does not benefit directly from the charge, it fears a crackdown will discourage lenders from issuing its cards.