Europe's antitrust chief warned credit card companies and banks on Wednesday that she will start legal action against them, saying that they overcharge consumers and businesses for using their cards, Reuters reported. A preliminary report by the European Commission found that consumers in some countries paid as much as double the credit card fees of those in other countries, while businesses paid up to six times depending on where they operated. "I am fed up when parties in the market are not behaving like they should be. I am highly aware, especially in this sector ... the consumer is paying far too much," Competition Commissioner Neelie Kroes told reporters. "There will be absolutely action from our side." Much of the problem comes from the development of payment card markets that evolved along national lines and are still fragmented, she said, adding that companies such as Mastercard and Visa appeared to be abusing the situation. But she also criticised banks that issue credit cards, albeit under the Visa and Mastercard brands, saying the big global players make some 25 percent of their profits from card-related services. "Banks are making too much profit and we will face them with the consequences on payment cards," Kroes said. A total of 23 billion card payments are made each year in the 25-country European Union for purchases that amount to 1.35 trillion euros ($1.64 trillion), and credit card companies, the report says, make high and consistent profits. Visa said in reaction to the report that differences in fees across the EU depended on a number of variables. "Existing differentials between member states reflect numerous factors including levels of market maturity, market size and the nature of different products in different countries," it said in a statement. Mastercard added that it had already voluntarily made changes to its practices aimed at increasing competition. --more 23 23 Local Time 20 23 GMT
