The credit card group Master­Card has been formally charged by the European Union’s top antitrust regulator, accused of breaking its rules by restricting competition between banks.

It is the latest escalation in a long-running antitrust battle between the European Commission and the credit card industry, and is the second time MasterCard has received antitrust charges from Brussels. It follows the Commission’s attack on groups such as Visa and MasterCard in April, when Neelie Kroes, the EU competition commissioner, accused them of making “outrageous” profits and operating a “closed shop”.

MasterCard confirmed on Thursday that it had received a confidential “statement of objections” outlining the charges last Friday. The Commission also confirmed the charges, saying it had taken “the preliminary view that MasterCard restricts competition between member banks by pre-determining a minimum price retailers must pay for accepting MasterCard and Maestro branded payment cards”.

The regulator also warned that, should it decide to rule against the group, it “could prohibit MasterCard’s interchange fees if the Commission is ultimately not convinced that possible efficiencies of MasterCard’s interchange fees sufficiently outweigh any restrictive effects on price competition be-tween merchant banks”.

Interchange fees are paid between banks servicing the shops that accept credit cards and the banks servicing the cardholder. The allegedly excessive interchange rates in the MasterCard network were the subject of a 2003 statement of objections by Brussels.

The crackdown on MasterCard is likely to affect millions of European consumers, since some 45 per cent of all payment cards issued in Europe carry the MasterCard or Maestro logo. The regulator has argued repeatedly that the high fees and lack of competition within card networks harm consumers because additional costs are ultimately passed on to cardholders.

Should the group be found guilty, it also faces antitrust fines of up to 10 per cent of its global annual turnover. Last year MasterCard posted net revenues of $2.9bn (€2.3bn, £1.6bn).

MasterCard, which used to be owned by a consortium of banks, was floated on the New York Stock Exchange last month, raising $2.4bn in its initial public offering. It is the second biggest credit card company behind Visa. Together the two groups control just under 90 per cent of the European market.

MasterCard said on Thursday it would respond to the charges both in writing and at a hearing this year. It pointed out that “a Commission’s negative finding may be appealed to the European courts”. Under Ms Kroes, the Commission has made the credit card industry one of the main targets of its antitrust actions.

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