MA MasterCard Incorporated

By Philip Georgiadis 

The European Union fined Mastercard Inc. EUR570.6 million ($648.2 million) over charges it artificially raised the costs of card payments inside the bloc, continuing a European crackdown on U.S. credit-card companies over fees.

The European Commission, the bloc's top antitrust regulator, said Tuesday that Mastercard had historically prevented retailers from shopping around for lower bank fees available outside of their home country. It said this led to higher prices for both retailers and consumers, and limited cross-border competition.

Credit-card firms charge so-called "interchange fees" to retailers' banks whenever a customer uses a credit or debit card for payment in a shop or online. These fees used to vary from country to country within the EU.

Mastercard flagged last month that it expected a $650 million fine, and on Tuesday said the closure of the long-running chapter represents "an important milestone for the company." The firm was given a 10% fine reduction after it cooperated with the probe and acknowledged infringements of EU competition rules. Mastercard said in December that it expected to book the charge in its fourth-quarter results.

The EU opened a formal antitrust investigation in 2013, and said its complaints related to Mastercard's actions before December 2015, when a legislative change capped fees in Europe.

Margrethe Vestager, the EU's competition chief who has emerged as a de facto global regulator for big U.S. tech companies, said: "By preventing merchants from shopping around for better conditions offered by banks in other member states, Mastercard's rules artificially raised the costs of card payments, harming consumers and retailers in the EU."

Major credit-card companies have been engaged in a protracted disagreement with regulators in the U.S. and Europe over fees charged to merchants.

In December, the European Commission said Mastercard and Visa Inc. agreed to lower fees charged to merchants when they accept debit or credit cards issued outside the region.

In the U.S., Visa and Mastercard were part of a group of companies that agreed to a $6.2 billion settlement with merchants related to card fees in September last year.

The fine comes a day after a French regulator fined Alphabet Inc.'s Google EUR50 million ($56.8 million) over data privacy in targeted advertising.

Write to Philip Georgiadis at philip.georgiadis@wsj.com

(END) Dow Jones Newswires

January 22, 2019 09:04 ET (14:04 GMT)

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