Final Report of the Hearing Officer in Cases COMP/34.579 MasterCard, COMP/36.518 EuroCommerce, COMP/38.580 Commercial Cards; collectively MasterCard (Pursuant to Articles 15 and 16 of Commission Decision 2001/462/EC, ECSC on the terms of reference of Hearing Officers in certain competition proceedings — OJ L 162, 19.6.2001, p. 21 )
Date: 2009-11-06
Institutions: European Commission
Subjects: activity report, audit, bank charges, competition law, electronic money, financial institution, international payment, restriction on competition








C_2009264EN.01001201.xml










6.11.2009   


EN


Official Journal of the European Union


C 264/12





Final Report of the Hearing Officer in Cases COMP/34.579 MasterCard, COMP/36.518 EuroCommerce, COMP/38.580 Commercial Cards; collectively ‘MasterCard’

(Pursuant to Articles 15 and 16 of Commission Decision 2001/462/EC, ECSC on the terms of reference of Hearing Officers in certain competition proceedings — OJ L 162, 19.6.2001, p. 21)

2009/C 264/05
The draft Decision in this case gives rise to the following observations:
The case results from investigations under Article 81 of the EC Treaty. It had its origins in a notification by the legal predecessors of MasterCard Europe SPRL (COMP/34.579), a complaint submitted to the Commission by EuroCommerce in 1997 (COMP/36.518) and an ex officio investigation into the multilateral interchange fees (MIF) for the commercial cards of VISA and MasterCard (COMP/38.580), which was opened on 22 November 2002.

Statement of Objections and reply time

The first Statement of Objections (SO) in the case was sent to MasterCard Europe SPRL, MasterCard Incorporated and MasterCard International Incorporated (MasterCard) (1) on 24 September 2003, after MasterCard informed the Commission on 25 July 2003 of its intention to initiate proceedings under Article 232 of the EC Treaty unless the Commission took a formal position with respect to MasterCard’s intra-EEA interchange fees. At that time the parties replied to the SO in writing, on 5 January 2004, and did not request to be heard orally. In the course of the proceedings, I admitted VISA International on 23 October 2003 as a third party with a sufficient interest to be heard within the meaning of Article 9 of Commission Regulation (EC) No 2842/98 on the hearing of parties in certain competition proceedings.

Supplementary Statement of Objections and reply time

On 21 June 2006, the Commission sent a Supplementary Statement of Objections (SSO) to MasterCard Europe, again addressing the association’s network rules and decisions on intra-European interchange fees. This SSO complemented the preceding Statement of Objections of 24 September 2003 with a more profound analysis of the restrictive effects of MasterCard’s intra-EEA interchange fees on competition.
Its purpose was in particular to set out the Commission’s analysis of the results of its detailed empirical investigation of MasterCard’s intra-European interchange fees (MIF) and the Honour All Cards Rule (HACR) (2) since 24 September 2003 and to call upon MasterCard to abolish the MIF and to limit the scope of the HACR.
MasterCard replied to the SSO on time, by 15 October 2006.

Access to file

After issuance of the SSO, on 3 and 4 July 2006, MasterCard exercised its right of access to the file by copying the paper file. On 22 August 2006 MasterCard was again provided access to the paper file upon requests of its counsel, who had not copied some parts of the file on 3 and 4 July.
MasterCard claimed, up to and including at the oral hearing, that the Commission had failed to provide immediate and full access to the file. With regard to access to file issues, although I was copied on some MasterCard correspondence with the case team, MasterCard never directly addressed a request for action with regard to access to file issues to the Hearing Officer, although it had sufficient opportunity to do so.

Admission of third parties

Many requests from third parties to be admitted to the proceedings were received in advance of the oral hearing.
In addition to VISA, I admitted 14 entities as third parties with a sufficient interest to be heard within the meaning of Article 13(1) of Regulation (EC) No 773/2004: The Royal Bank of Scotland, Airplus, three Spanish payment card systems (Servired SC, Sistema 4B SA, Euro 6000 SA), the British Retail Consortium (BRT), a Belgian retail chain (Kappé International BV), British Petrolium (BP), the European Retail Roundtable (ERRT), Hotels, Restaurants and Cafés in Europe (Hotrec), an Austrian association of hotels (ÖHV), the International Air Transport Association (IATA), Royal AHOLD, IKEA.
VISA, Airplus, ÖHV, Hotrec, IATA and the Royal Bank of Scotland submitted written comments.

Oral hearing

The oral hearing was held on 14 and 15 November 2006, and was attended by MasterCard, the complainant (EuroCommerce), and nine third parties.
Six months after the oral hearing, on 24 May 2007, MasterCard wrote to me regarding the ‘seemingly late and selective dispatch’ of MasterCard’s response to the SSO to the Member State representatives prior to the hearing.
MasterCard pointed out that its response to the SSO had been sent on 15 October 2006, while the Commission did not forward the response to the national authorities of the Member States (NCAs) until Friday, 10 November 2006, only a few days before the hearing. According to MasterCard, this late dispatch prevented the Member State representatives from being able fully to understand MasterCard’s arguments in advance of the hearing, alleging a breach of MasterCard’s legitimate expectations and right to be heard.
Starting from the premise that, in principle, cooperation by the Commission with NCAs is a purely internal matter, I nevertheless informed MasterCard that no NCAs had complained at the time or subsequently about not having been fully informed. Member State representatives attended the hearing and had the opportunity to ask questions. There was no indication that the obligation of the Commission to ensure that the Advisory Committee that precedes the adoption of the final decision can deliver its opinion on the case in full knowledge of the facts has been violated.
In my view MasterCard’s procedural rights in this respect, including its right to be heard by the Commission, were not violated.

Letter of facts

On 23 March 2007 the Commission sent a letter to MasterCard (letter of facts) providing MasterCard with access to documents collected since MasterCard had access to the file in July and August 2006 and setting out possible conclusions the Commission intended to draw from the new facts in a decision.
MasterCard wrote to me on 17 April 2007, arguing that the Commission should have issued a new SSO instead of a letter of facts, and claiming that the letter of facts contained new legal arguments and essential facts not contained in the SSO of 20 June 2006. I replied to MasterCard on 4 May 2007 that while it is correct that the letter of facts complemented the Commission’s previous fact finding on the qualification of MasterCard as an association of undertakings and further assessed the legal implications of the IPO, in my view the letter of facts did not materially alter the evidence for the contested infringement.
On 16 and 22 May 2007 MasterCard replied to the letter of facts.

Confidential information

On 2 May 2007, I received a letter by counsel to MasterCard, seeking guidance on matters relating to the disclosure of confidential information and business secrets.
Upon examination, it was found that the Commission had disclosed certain specific information which, taken together with other parts of the file and information potentially available to MasterCard itself, created an evident risk that confidential data, provided by third parties upon a request for information, might theoretically be computed by MasterCard.
By letter of 10 May 2007, the Commission services asked both MasterCard and MasterCard’s counsel to take the necessary steps with a view to remedy the situation. The information providers concerned were informed by the Directorate-General for Competition on 30 November 2007.

The draft Decision

The draft Decision submitted to the Commission only contains objections in respect of which the parties have been afforded the opportunity of making known their views.
I conclude that the rights of the parties to be heard have been respected in the present case.

Done at Brussels, 14 December 2007.

Karen WILLIAMS





(1)  For a detailed description of the corporate structure of MasterCard, before and after the Initial Public Offering (IPO) of May 2006, I refer to the Decision, paragraph 40 to 99.

(2)  On the functionalities of the Honour All Cards Rule cf. Decision, paragraph 195.