91997E2980

WRITTEN QUESTION E-2980/97 by Klaus-Heiner Lehne (PPE) to the Commission (1 October 1997)

Subject: Admissibility of special credit card fees on purchases in other Member States

The issuers of credit cards (e.g. Eurocard-Mastercard, Visa and Barclay) charge their clients a special fee of up to 2.3% of the invoice amount every time they use their cards abroad. This makes purchases in other Member States rather more expensive. In the age of electronic payment transactions it also creates a psychological barrier to shopping in neighbouring countries: the mere fact that special fees are payable on purchases made abroad deters the customer. The damage consequently done to the internal market and the discrimination against cross-border trade and payment transactions are unmistakable. There is no objective justification for this behaviour of the card-issuing companies, since the use of a credit card in the age of advanced EDP systems generates the same costs at home and abroad. Much of the advertising of these companies, moreover, emphasizes that their cards can be used abroad, while failing to refer to the special costs that then arise.

Although the contractual clauses on which this practice is based have been declared invalid by German courts on several occasions, the card-issuing companies are not prepared to forgo these special fees. In fact, they threaten any client complaining about or taking legal action against this practice with the termination of the card contracts and actually carry out this threat. This has serious implications for the individual client, not least because the major card-issuing companies have a virtual monopoly.

Is the Commission aware of the above, and what does it intend doing to prevent as soon as possible a practice that is in contravention of European law and inappropriate to the internal market?

Answer given by Mr Monti on behalf of the Commission (10 November 1997)

The Commission is aware of the practice to which the Honourable Member refers, but has no complete overview of the actual fees applied. Indeed, according to the information at the Commission's disposal, these fees are not fixed by card organisations such as Eurocard-Mastercard or VISA, but by individual banks issuing credit cards to their customers.

The Commission agrees with the Honourable Member that this practice can create a psychological barrier, but thinks that these fees are not in conflict with Community law, except where they would flow from agreements or concerted practices prohibited under Article 85 of the EC Treaty. In particular, the fixing of these fees is not, in the eyes of the Commission, a restriction in the meaning of Articles 59 or 73b of the EC Treaty. The fees are prices for services determined by offer and demand.