Reuters: Regulatory News: UPDATE 1-EC tackles Visa Europe on credit card fees

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UPDATE 1-EC tackles Visa Europe on credit card fees Jul 31st 2012, 10:58 Tue Jul 31, 2012 6:58am EDT * Visa Europe settled with regulators on debit card fees in 2010 * Group says disappointed with EU Commission's approach * EU antitrust breaches can incur fines up to 10 pct of global turnover By Foo Yun Chee BRUSSELS, July 31 (Reuters) - EU competition regulators have told Visa Europe, the European licensee of Visa Inc, its cross-border credit card fees harm competition between banks and lead to higher consumer prices. EU Competition Commissioner Joaquin Almunia had flagged the move to Reuters in January and reaffirmed last week that he intended to take action. Visa Europe, the largest card network in the 27-country European Union, cut its debit card fees in December 2010 to settle a competition probe by the European Commission into that part of its business, but has held out against doing the same for its credit card fees. The Commission, which acts as competition regulator in the European Union, said the company's cross-border consumer credit card fees in Europe breach EU rules. It said its charge sheet or "statement of objections" sent to Visa Europe also covers domestic credit card fees in eight EU countries, including Italy, the Netherlands, Belgium and Sweden. "Visa's MIFs (multilateral interchange fees) harm competition between acquiring banks, inflate the cost of payment card acceptance for merchants and ultimately increase consumer prices," the EU watchdog said in a statement. Visa Europe, which is owned and operated by more than 3,700 European member banks, said it regretted the Commission's decision. "We are very disappointed that the Commission has taken such a confrontational approach and was not willing to find a solution to support investment and innovation in European payments for the benefit of European consumers and to allow European payments to compete globally," Visa Europe's chief executive Peter Ayliffe said in a statement. The company could face fines of up to 10 percent of its global turnover if found in breach of EU antitrust regulations. It posted record revenues of 1 billion euros ($1.22 billion) last year. Europe's second-highest court in May backed the EU regulator's crackdown on card fees in a case involving Mastercard, the world's second-biggest credit and debit card network operator. Visa Europe's credit and debit cards account for about 41 percent of all payment cards issued in Europe. Link this Share this Digg this Email Reprints

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