US antitrust case likely to influence decision on EU credit card charges

The European Commission expects to reach a decision by the end of the year on credit card fees charged between banks and retailers. The EU has so far spent more than three years investigating the commissions passed on by banks to retailers for accepting credit card payments.

The investigation began after a complaint from the EU retailers' organisation, Euro Commerce, in 1997. It is examining many of the charges at the centre of an antitrust case in the US taken by the US government against Visa and MasterCard.

Commenting on the US case in Brussels yesterday, European Commission spokeswoman Ms Amelia Torres said the EU's antitrust watchdog was also looking into various issues relating to Visa and credit cards in general.

"One of the questions the Commission is looking into is the fees that the banks must pay each other for carrying those credit card payments, and there we expect a decision before the end of the year," she said.

In opening arguments in a federal trial this week, the US government accused the Visa and MasterCard credit card networks of violating antitrust law and blocking competition through exclusionary tie-ups with banks. This is not a concern for the European Commission, as a move by Visa to prevent member banks from issuing other credit cards was rejected by the Commission some years ago.

Ms Torres said the Commission is examining Visa's payment rules as part of the ongoing investigation. The outcome of the US trial could alter the shape of the massive US credit card industry, shake up the structures of Visa and MasterCard and alter the way in which rivals like American Express conduct their operations.