MasterCard To Appeal OFT Fee Ruling

by Robin Pilgrim, LawAndTax-News.com, London

09 September 2005

Credit card association MasterCard has pledged to appeal the UK Office of Fair Trading's ruling on its credit card fees before the Competition Appeal Tribunal.

The OFT on Tuesday announced that in its view, fees charged by MasterCard members are anti-competitive.

According to the OFT, the collective agreement between members of the MasterCard UK Members Forum (MMF), including most major banks, which set the multi-lateral interchange fee (the MMF MIF) paid on virtually all purchases in the UK made using UK-issued MasterCard credit and charge cards between 1 March 2000 and 18 November 2004, restricted competition and infringed Article 81 of the EC Treaty and the Chapter I prohibition of the Competition Act.

However, MasterCard Northern Europe's general manager, John Bushby hit back in a statement responding to the ruling, arguing that:

"For the OFT to claim that the interchange fee agreement either reduced competition or disadvantaged consumers or retailers is simply wrong. Consumers benefit from greater choice as more retailers accept credit cards, and retailers of all sizes benefit as card usage expands. As such, today's OFT ruling is bad news for both healthy competition and the economy."

He suggested that if the Office of Fair Trading's ruling is allowed to stand, it would lead to decreased services for UK cardholders and an increase in fees and charges.

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