EU launches anti-trust probe into VisaMarch 26th, 2008 - 8:45 pm ICT by admin
Brussels, March 26 (DPA) The European Commission Wednesday launched an anti-trust probe into payment-card provider Visa Europe Ltd, to find whether it has been setting unfair fees for international payments. “The European Commission has decided to open formal antitrust proceedings against Visa Europe Limited in relation to its multilateral interchange fees (MIF) for cross-border point of sale transactions,” a commission statement said.
“This initiation of proceedings does not imply that the commission has proof of an infringement. It only signifies that the commission will conduct an in-depth investigation of the case as a matter of priority,” the statement said.
Visa’s system of charging retailers’ banks for accepting payments made with Visa cards from another country was first challenged in 1997, when European retailers’ association EuroCommerce complained to the commission that its prices were unfairly high.
In 2002 Visa promised to revise its fee structure, reducing the cost of such cross-border transactions and making the fees more transparent. On those grounds, the commission decided to exempt Visa’s fee system from EU competition rules until the end of 2007.
In 2005-06, however, the commission ran an in-depth inquiry into the workings of the retail-banking sector within the European Economic Area (EEA - the European Union plus Iceland, Liechtenstein and Norway).
That inquiry concluded that some MIF systems could be preventing the development of an efficient international-payments system.
On the basis of the inquiry, on Dec 19, the commission prohibited Mastercard’s MIF system for cross-border payments within the EEA, saying that it raised costs for retailers without improving efficiency.
With the expiry of the exemption on Visa’s MIF system, and the experience gained from the 2005 inquiry, commission officials are now free to examine whether Visa, too, breaches EU competition rules.
There is no deadline for a decision, commission officials said.
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