Arlington, VA — February 2, 2007 — The Food Marketing Institute (FMI) applauds the finding by the European Commission that "widespread competition barriers … unnecessarily raise the cost of retail banking services for European firms and consumers," according to Competition Commissioner Neelie Kroes, releasing a report this week on the bank and credit card payments business.
"The commission will make full use of its powers under competition law to tackle these barriers. …The commission continues to have serious concerns about the levels of multilateral interchange fees," Kroes said.
"We are pleased that the commission has published its report on the anticompetitive credit card company practices that lead to excessive interchange fees," said FMI President and CEO Tim Hammonds. "We welcome its effort to force disclosure of these hidden fees that are costing consumers and retailers tens of billions of dollars a year."
"Most illuminating," Hammonds added, "is the commission’s finding that, 'The sector inquiry has identified several significant competition issues in the European payment cards market that confirm the need for strong competition law enforcement....'"
"As Congress investigates the interchange practices of Visa and MasterCard in America, we believe it will find similar anticompetitive behaviors here in the U.S., and, if it does, we urge our government to act accordingly," Hammonds added.
In 2005, interchange fees cost U.S. consumers $30.7 billion — more than late fees, annual fees and cash-advance fees combined. This amount is up 17 percent from 2004 and 85 percent from 2001.