The European Commission has opened a formal inquiry into the fees imposed by Visa on card payments made across EU borders, saying it will seek to determine whether prices have been fixed at an unduly high level.
The Commission’s antitrust department yesterday (26 March) announced the beginning of proceedings against Visa Europe over its multilateral interchange fees (MIF).
The inquiry will focus exclusively on the cross-border application of these charges, which fall directly under EU rules, but the move at European level might prompt similar actions by national competition authorities.
The inquiry follows a fine which Brussels recently inflicted on Visa’s competitor, MasterCard, over the same charges. There is no deadline for the closure of the inquiry.
The investigation will determine whether Visa’s MIF is set at an abnormally high level, something the Commission believes would unfairly penalise consumers because shop owners pass on the costs to both card and cash payments.
The Commission has stated on several occasions that it is not against MIFs in principle, provided that they bring clear benefits to consumers or provide technical or economic progress.
The Commission will also look into the legality of the so-called ‘Honour-All-Cards-Rule’ applied in connection with cross-border transactions. In 2001, Brussels cleared a rule in the Visa scheme which obliges merchants to universally accept all valid Visa-branded cards. But now that the Commission has to verify potential price fixing regarding Visa’s MIFs, it must also open an investigation there, otherwise merchants could be forced to apply illegally fixed prices.
In a statement, Brussels underlined that “the initiation of the proceedings does not imply that the Commission has proof of an infringement”.
The announcement came in the wake of Visa’s strong market debut on the New York Stock Exchange on 19 March, following a record 17.9 billion dollar initial public offering (IPO), the highest ever recorded in the US.