BRUSSELS, Belgium - The European Commission has fined financial service group Mastercard 570.6 million ($647 million) for breaching antitrust rules.
The commission said Tuesday in a statement that Purchase, New York-headquartered Mastercard limits retailers from taking advantage of offers from other providers.
"By preventing merchants from shopping around for better conditions offered by banks in the other member states, Mastercard's rules artificially raised the costs of card payments, harming consumers and retailers in the EU," Margrethe Vestager, a commissioner responsible for EC competition policy, said Tuesday.
Mastercard is the second largest credit card and payment solution company operating in the European Economic Area (EEA), whic includes all clountries in the European Union together with Iceland, Liechtenstein, and Norway.
"Mastercard's rules obliged acquiring banks to apply the interchange fees of the country where the retailer was located. Prior to Dec. 9, 2015, when the Interchange Fee Regulation introduced caps, interchange fees varied considerably from one country to another in the EEA," the commission's statement said.
"As a result, retailers in high-interchange fee countries could not benefit from lower interchange fees offered by an acquiring bank located in another Member State," it added.
"The Commission investigation found that because of Mastercard's cross-border acquiring rules retailers paid more in bank services to receive card payments than if they had been free to shop around for lower-priced services."