The legal opinion follows a European Commission ruling that said
MasterCard's cross-border "interchange" fees — levied on retailers'
credit and debit card transactions — broke antitrust rules and had
to be changed.
Mastercard challenged this but the court adviser's recommendation
now means it is likely to fail.
The EU antitrust regulator says such fees cost businesses across
Europe 10 billion euros ($13.64 billion) a year.
Many consumer rights campaigners argue these hidden costs, charged
when banks process payments by, for example, a German visiting
London, are passed on to the consumer.
"I propose that the court should dismiss the main appeal (by
MasterCard) and the cross-appeals," Advocate General Paolo Mengozzi
at the EU Court of Justice said in his opinion.
The court, which will issue its judgement in the coming months,
follows such advice in the majority of cases.
The opinion represents a setback to the world's second-largest
credit and debit-card company after Visa <V.N>. Mastercard says such
interference would actually lead to higher costs for consumers and
encourage the black economy.
The advice may also bolster support for proposed European Union
rules to cap charges on card payments that have yet to be approved
by EU countries and the bloc's parliament.
That crackdown is part of the Commission's push to boost e-commerce
in the 28-country bloc and reduce costs for business.
Interchange fees are collected and kept by banks processing payments
using cards. While MasterCard does not benefit directly from the
charge, it fears a crackdown will discourage lenders from issuing
MasterCard, which faces increasing competition from rival payment
schemes such as eBay's <EBAY.O> PayPal, was critical of the
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"Practical experience in countries such as Spain, Australia and the
United States shows that capping interchange shifts the costs for
transactions from retailers on to consumers," MasterCard President
Javier Perez said in a statement.
"A one-size-fits all approach to interchange across Europe will
drive the cost of cards up for consumers ... and ignores the very
different market realities across European countries," he said.
EU retail lobby EuroCommerce, whose 1997 complaint triggered the
first regulatory investigation into MasterCard, welcomed the
"This should be another reason for the European Parliament to go
forward with regulation on interchange fees," said Ruth Milligan of
MasterCard has said the value of cross-border card transactions is
less than 5 percent of all purchases made by cardholders. A lower
court threw out its challenge in 2012.
In the long-running dispute with the European Commission about such
charges, MasterCard has made some concessions.
It agreed to reduce its debit card charges to 0.20 percent of a
transaction and 0.30 percent for credit cards, pending this court
Rival Visa Europe, Europe's largest card network and the European
licensee of Visa, has offered similar concessions.
($1 = 0.7329 euros)
(Editing by John O'Donnell and Pravin
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