Antitrust Law Daily Wrap Up, ANTITRUST NEWS: UK authority closes probes of credit card interchange fees following EU regulation, (May 6, 2015)

By Michael Menzhuber, J.D., LL.M.

The U.K. Competition and Markets Authority (CMA) has decided to close its investigations of MasterCard’s and Visa’s multilateral interchange fees (MIFs), following the April 20 approval of an Interchange Fee Regulation (IFR) by the Council of the European Union, the antitrust agency announced today.

The IFR’s imposition of caps on interchange fees will take effect later in 2015. Because the IFR will deal with the harm to consumers and retailers caused by current levels of interchange fees, the CMA has confirmed that it will close its cases.

Before the EU began taking action, the Office of Fair Trading (OFT), the predecessor to the CMA, opened the investigations into MasterCard and Visa. The OFT also intervened at the General Court and the Court of Justice to support the EC in defending its decision that MasterCard’s European interchange fee arrangements infringed competition law. In addition, the OFT played an important role in making a case for the establishment of the UK Payment Systems Regulator, which will be the competent authority for the monitoring and enforcement of compliance with the IFR in the UK.

Under the IFR, MIFs will be capped at no more than 0.3% and 0.2% of the value of the transaction for credit card transactions and debit card transactions, respectively. These caps will take effect and apply to MasterCard and Visa consumer payment card transactions six months after the IFR enters into force.

The CMA had previously announced, in November 2014, that it had provisionally decided to close its investigation as a result of the EU’s pending IFR. Before finalizing its decision to do so, the CMA consulted with the British Retail Consortium regarding its provisional decision to close the investigation.

News: Antitrust