Vice President Almunia said: "The cap on inter-bank fees for Visa Europe's credit cards and the commitments ensuring cross-border competition are excellent news for European consumers, since the fees paid by retailers end up on their bills. Today's decision adds to what has already been achieved through the Commission's antitrust investigations concerning inter-bank fees."
Payments by card play a key role in the Single Market, both for domestic purchases and for purchases across borders or over the internet. European consumers and businesses are making more than 40% of their non-cash payments per year through payment cards. Any competition distortions in this field may therefore hamper the good functioning of the Single Market and harm European consumers through higher prices.
In particular, inter-bank fees are paid by retailers' banks (acquirers) to cardholders' banks (issuers). The fees are fixed jointly by the banks retailers and consumers have no means of influencing them through competition. The reduction of these fees leads to lower costs for merchants when they receive payments by card. Since retailers normally pass on these charges to their customers through the higher prices for the goods and services they sell, consumers ultimately pay the fees that banks charge retailers. This means that a reduction of these fees is likely to benefit not only merchants, but also consumers.
The Commission's concerns:
(i) Rules on 'cross-border acquiring' in the Visa system that limit the possibility for a merchant to benefit from better conditions offered by banks established elsewhere in the internal market. These rules today oblige banks to apply the inter-bank fees of the country where the merchant is located even if the fees in their home country are lower. As a result cross-border competition remains limited, the internal market is artificially segmented, and merchant service fees for accepting cards vary widely across the EEA.
(ii) All inter-bank fees set by Visa for transactions with consumer credit cards in the EEA. Currently
In these commitments, which complement its commitments of 2010 on debit transactions, which were made legally binding by the Commission in
(i) As regards 'cross-border acquiring': to allow acquirers from
(ii) As regards inter-bank fees: Visa Europe agrees to cap its credit card MIFs at 0.3% for all consumer credit card transactions in the EEA where Visa Europe sets the rate. This concerns cross-border fees (where a card issued in one EEA country is used in another one) and domestic fees in currently ten Member States, and represents a reduction of about 40-60%. The level of 0.3% for credit card transactions was also offered by
(iii) As regards transparency: to simplify its inter-bank fee structure and make the invoicing of card acceptance services more transparent to merchants.
The Commission continues the proceedings against
Visa's credit and debit cards represent approximately 41% of all payment cards issued in the EEA. Visa has the largest acceptance network within the EEA with over 5 million merchants accepting its payment cards. In 2010 a total of 35 billion card payments were made in the EEA, with a total value of
Following the opening of proceedings in
In 2007, the Commission prohibited
In complement to enforcement of EU antitrust rules, the Commission has proposed legislation to cap inter-bank fees for consumer debit and cards in the EU (see IP/13/730).
Article 101 of the Treaty on the Functioning of the EU (TFEU) and Article 53 of the EEA Agreement prohibit cartels and restrictive business practices. Article 101(3) TFEU allows certain practices to be exempted from this prohibition on condition that they improve production or distribution or contribute to technical or economic progress, provided that a fair share of the benefits are passed on to consumers, and that the practices are proportionate and do not eliminate competition.
Article 9 of the EU's Antitrust Regulation (Regulation 1/2003) allows the Commission to conclude antitrust proceedings by making commitments offered by a company legally binding. Such a decision does not reach a conclusion on whether EU antitrust rules have been infringed but legally binds the company to respect the commitments. If the company breaches these commitments, the Commission can impose a fine of up to 10% of its annual worldwide turnover, without having to find an infringement of Articles 101 or 102 TFEU.
More information on this investigation is available on the Commission's competition website in the public case register under the case number 39398.
TNS 30FurigayJane-140227-4649770 30FurigayJane
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