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EU court rejects arguments by France’s CB Group for fees on new players in card market

A European Union court ruled last week that CB Group, which is responsible for managing France’s bank card payments, violated EU competition laws by imposing tariffs on new market participants.

In spite of claims by CB Group that the court misclassified fees that the firm said were essential to prevent system free-riding, the EU General Court rejected the company’s appeal, Law 360 reports.

CB Group said that the fees were necessary in order to fund system maintenance and operation, but the court said that the argument did not change the fact that the charges violate EU competition law.

“It is apparent from the caselaw…that the fact that the measures at issue pursue a legitimate objective of fighting against free-riding on the CB system does not prevent that they can also be considered as having a goal of restricting competition,” the court said, according to Law 360.

The European Commission ruled in 2007 that CB Group, whose board members are appointed from France’s major banks, violated EU antitrust regulations with the tariffs.

The EC ordered the company to stop imposing the fees, as well as a “sleeper member fee” on issuers that had not developed a significant bank card operation since joining the network. The commission said that the measures discouraged new entrants to the market and were applied in a manner that would make it difficult for smaller banks offering lower card rates, Law 360 reports.

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