News, analysis and personal reflections on the markets & the financial sector

Friday, September 25, 2009

Visa and MasterCard hit by Hungarian fine

Authorities in Hungary have fined Visa Europe, MasterCard and some of the country's biggest commercial banks after ruling that they formed an illegal bank card fee cartel.

According to Reuters, GVH - the competition authority - found the three parties guilty of limiting competition by creating and maintaining an interchange fee structure.

MasterCard and Visa were hit with a combined fine of $2.6 million, while the country's financial institutions were ordered to pay a total penalty of $5.25 million - of which $1.52 million was levied against OTB Bank, the largest institution of its kind in Hungary.

Chairman of the GVH ruling panel Tihamer Toth said at a news conference that "competition between the two card firms and the card-accepting banks was distorted and limited" as a result of the cartel.

However, all parties have denied any wrongdoing and Visa and MasterCard both stated that they plan to appeal.

The GVS was established in 1990 and aims to promote "fairness and freedom" in relation to competition in markets in Hungary.

No comments: