The United Kingdom's Office of Fair Trading accused the credit card association MasterCard UK, which includes most major British banks, of overcharging customers between March 2000 and November 2004.
The OFT found that an agreement between MasterCard UK members, setting the so-called 'interchange fee' - a charge paid to banks by retailers - caused high cost for UK consumers and was against competition regulations. The British watchdog said that the interchange fee was too high and forced the UK retail sector to raise prices.
MasterCard UK disagreed with the OFT and announced that it would appeal the decision. The company said that British consumers benefit from the agreement, as more retail stores accepted credit cards.
MasterCard has changed its fee policy last November, but the change has not satisfied the OFT. If the company cannot prove the new fees do not violate competition rules, it may be found guilty and fined up to 10% of its annual worldwide turnover.
The OFT is also investigating MasterCard's biggest rival, Visa, in the same case.
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UK regulator warns MasterCard