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article imageEU charges credit giant MasterCard with antitrust violations

By Nate Smith     Jul 11, 2015 in Business
The European Union on Thursday formally charged credit card giant MasterCard with antitrust allegations, alleging the credit giant is artificially raising monthly minimum payments for its European customers.
Charges from the EU come on the heels of a two-year investigation into the lending practices of both MasterCard and Visa.
Investigations continue as regulators look into increasingly high minimum monthly payments, especially for European credit card customers, according to the complaint.
Both Visa and MasterCard are U.S.-based companies, and the credit lenders charge an "interchange" fee to European customers each time they make credit card purchases outside the country where the card was originally issued. Those "interchange fees" vary depending on the country.
For example, A Danish shop owner that accepts a credit card from a French tourist would, under current rules, have to pay such an "interchange fee," to the tourist's bank in France.
Antitrust regulators in the EU charge that these fees are unreasonable, and create an artificially high minimum payment for customers, and those ballooned monthly minimums increase the cost for other goods and services.
From MasterCard:
We will be formally responding to the statement of objections and are also working with the European Commission on the issue as part of an ongoing constructive dialogue.
If the allegations are verified, MasterCard would be forced to reduce those interchange fees, and repay about 10 percent of its annual global revenue, which last year totaled over $9 billion.
More about Mastercard, Finance, Credit card companies, antitrust violations, Big Banks
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