By Gokhan Ergocun

ISTANBUL

The European Commission (EC) imposed a €570.6 million ($647 million) fine on finance company Mastercard for breaching the antitrust rules.

The commission said Mastercard restricts retailers the possibility to benefit from better offers of other banks.

Margrethe Vestager, a commissioner responsible for competition policy, said: "By preventing merchants from shopping around for better conditions offered by banks in the other member states, Mastercard's rules artificially raised the costs of card payments, harming consumers and retailers in the EU."

In the European Economic Area (EEA) -- EU countries and also Iceland, Liechtenstein, and Norway -- Mastercard is the second largest card scheme with its Mastercard and Maestro brands.

The commission's statement said: "Mastercard's rules obliged acquiring banks to apply the interchange fees of the country where the retailer was located. Prior to Dec. 9, 2015, when the Interchange Fee Regulation introduced caps, interchange fees varied considerably from one country to another in the EEA.

"As a result, retailers in high-interchange fee countries could not benefit from lower interchange fees offered by an acquiring bank located in another Member State," it added.

The interchange fee refers to the fee that is paid by merchants' to the cardholder's banks.

The commission has started to investigate Mastercard for breaching antitrust rules.

The commission noted: "The Commission investigation found that because of Mastercard's cross-border acquiring rules retailers paid more in bank services to receive card payments than if they had been free to shop around for lower-priced services."