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MasterCard Fined $648 Million for High EU Card Fees (bloomberg.com)
MasterCard was fined 570.6 million euros ($648 million) by the European Union for imposing rules that regulators said may have artificially raised the costs of card payments in the region. From a report: The European Commission said MasterCard unfairly prevented retailers from seeking cheaper rates from banks outside the EU country where they are based. MasterCard's curbs on cross-border acquiring ended when the EU introduced credit card legislation in 2015. The EU's probe started in 2013 and escalated with a statement of objections two years later. MasterCard last month set aside $650 million to cover the fine, less than a potential 1 billion euros it flagged as a possibility in 2017. The company got a 10 percent fine reduction for cooperating with the EU, regulators said.
I can't believe a credit card company would have high card fees. At least that sounds like an EU problem. They never do that kind of stuff in the US.
Ninjas don't carry tic tacs
Who gets the money?
People got ripped off, yet I have the uncanny feeling the fine will just make our fat and stupid EU politicians even fatter and more stupid. Nothing for the victims obviously.
Ten percent penalty reduction for cooperating? Sounds to me like never cooperating is a good gamble. Heck, delay something for four years and inflation will pay you money all by itself.
The credit card market is an oligopoly and therefore must be regulated. The EU is right to force Mastercard into lowering its fees.
Sounds to me they are just closing down an ATM where big corporations leech from the population.
All too often the "business friendly" regulatory stance is "we will punish your sins with a slap on the wrist, but we'll never make you wish you hadn't".
Depending on how much Mastercard pocketed from this initiative while the getting was good, this could actually have tipped into "we almost wish we hadn't" territory.
Most corporate fines usually wind up in the neighbourhood of Tony Soprano's vig: mere cost of doing business, everybody wins.
Why does no one ever go to jail over these things? Clearly there were humans behind this. Why don't these companies lose their charters? Wow- they were fined. They'll just raise the fees on everyone else to get the $s back. No big deal. I know I would go to jail if I'd run this kind of scam personally. Bullshit. What about giving the money back to the people they bilked?
They can try but they never pay.
Corporatism != Free Market
right through to the customers somehow.
;)
Just my 2 cents
So, you'd rather MC just keep the money? Cause that's the alternative. This sounds a lot like you're complaining about a half-solution instead of celebrating a half-solution.
Your ad here. Ask me how!
The exact amount of the fee is put into the EU budget and the member state fees are reduced with the exact same amount so in the end all this means that the EU member states have to pay $648 million less in fees for the 2019 fiscal years. So no, this is not a government revenue stream.
Keep this story in mind the next time you hear someone talking about how going " cashless " will be such a wonderful thing.
MasterCard, Visa, PayPal, et. al. can set whatever rates and fees they want with little or no oversight / regulation today.
Those fees are then passed onto the consumer.
( They can also cherry-pick what business and merchandise types are allowed through their systems )
When their CEO decides he / she doesn't like:
Adult-Industries ( porn )
Guns
Women's Health Clinics
$pick_your_favorite_controversial_topic
They can ( and, in the case of PayPal, some do ) simply ban those transaction types and there isn't a damn thing you can do about it.
For now, at least, cash is still an option.
The credit card companies got laws passed making it illegal for merchants to pass credit card fees on to customers. That means the person who decides which card to use is insulated from the cost associated with using that card, completely handcuffing market forces which would drive credit card processing fees down.
Get rid of those laws (regulations), and the credit card processors would be forced to compete head-to-head on price, driving their fees down.
Who are the EU nations spending all this money on?
If your question is sincere (but I don't think it is) the answer is mostly development projects to help poorer areas in all member states improve their economies. A miniscule amount of the EU's spending of course also goes to run the bureaucracy which by any standards imaginable is orders of magnitude more efficient than any national bureaucracy the planet has ever seen (are you aware that just the city of London has more bureaucrats than the entire EU?). One of many functions those bureaucrats do when they serve the citizens of the EU is to deal with matters like these which harm European consumers.
Credit Cards as payment for fines?