Visa Europe in Almunia’s sights
By Sophie Mosca | Wednesday 20 June 2012
The European Commission’s investigation into fees charged by Visa Europe for payments by deferred debit/credit cards will be moving into the next stage shortly. Competition Commissioner Joaqui Almunia announced to the European Parliament’s Committee on Economic Affairs (ECON), on 19 June, that he intends to “send a statement of objections to Visa soon” detailing the company’s alleged infringements of EU competition law. This move was expected following the decision by the EU court in a similar case concerning MasterCard.
At issue are the multilateral interchange fees (MIF) charged to retailers on the basis of the amount of the payment card transaction and retained by the card-issuing bank. These fees supposedly correspond to the costs of processing payments and vary from one member state to the next. For the Commission, they are unfairly over-valued and set a floor level for costs charged to retailers, thus restricting competition through prices.
Based on the MasterCard ruling handed down by the EU General Court, on 24 May (see
Europolitics 4430), which confirmed the executive’s conclusion that the costs are disproportionate and that it is impossible for merchants to exert competitive pressure to bring down the amount, the Commission can pursue the Visa case confidently.
The probe, opened in 2008, does not concern MIFs for classic credit cards, as Visa Europe proposed in 2010, for a four-year period, to lower to 0.20% of the transaction cost the average maximum weighted level of MIFs applied to these cross-border transactions. The Commission made these commitments binding in December 2010.