Britain's consumer watchdog said it was continuing its six-year probe into the fees charged by credit card association MasterCard, but industry sources said it was expected next week to shift focus onto current fees rather than past charges.
A report in today's Daily Telegraph newspaper said the Office of Fair Trading (OFT) was set to abandon its attempt to force MasterCard to cut fees. It cited sources close to the situation as saying the OFT would withdraw its statement of objections at a Competition Appeal Tribunal (CAT) court hearing on Monday.
A spokesman for the OFT said: "We can't comment on proceedings in the CAT in advance of the hearing on Monday, but we can confirm that our current investigation into MasterCard and Visa's multiple interchange fees (MIF) is continuing.
"We haven't stopped our work in this area." The OFT, after its longest-ever probe, said last September that fees charged by MasterCard UK's members, including most major banks, were anti-competitive and pushed up retail prices. MasterCard appealed the decision to CAT.
MasterCard has altered its system, but the OFT launched a probe into the new fees in February. In October it started an investigation into Visa's fees.
Industry sources said the watchdog was expected to switch its focus from the old charges to the current fees charged by both organisations, indicating that it does not regard the new fees as resolving its concerns about anti-competitive charges.
MasterCard, which has 30 million UK cardholders, said it was not able to comment while the case is in front of CAT, but it repeated that it regarded its fees as "entirely lawful".
The dispute revolves around MasterCard's "interchange fees" -- charges retailers pay to the banks that issue the credit cards. The OFT has said the fees are excessive and likened them to a tax on consumers.
The OFT has been investigating MasterCard's fees since 2000. Visa and MasterCard members are essentially all major British financial institutions, including leading credit card issuers Barclays and Royal Bank of Scotland.
Britain's credit card issuers have come under increased scrutiny in recent years amid uncertainty about fees charged and as consumers continue to put record amounts on their cards, despite a slowdown in overall spending.