European consumers will face more transparent credit and debit card fees and potentially lower retail costs after a landmark court ruling confirming MasterCard overcharged for cross-border card transactions. The judgment from the EU's second highest court is an important victory for the European Commission, which found in 2007 that the card payment group restricted competition and inflated prices for retailers and consumers. While MasterCard will appeal the ruling, in the short term the decision may be enough to trigger an overhaul of card services in Europe and a new regulatory clampdown on relatively untouched domestic fees. Most consumers are unaware of the charges, which provide multibillion-euro revenue streams for card-issuing banks. MasterCard sees the charges as vital to a cheap and secure service with benefits such as insurance and loyalty rewards. But consumer groups denounce the hidden fees as "profiteering." The legal certainty from the ruling will add new urgency to the EU investigation of Visa's credit card fees, multiple national court cases on domestic fees and an ongoing probe by the UK Office of Fair Trading. Joaquín Almunia, the EU's competition chief, told Visa Europe and MasterCard to "consider carefully" how to bring their fees "in line with competition rules." In 2006 card payments in the EU cost merchants about €25bn ($31bn). These fees ultimately impact consumers. After the Brussels decision in 2007, MasterCard significantly cut its interchange fee rate on an "interim" basis, without accepting wrongdoing. Its appeal - backed by big European retail banks such as Royal Bank of Scotland, HSBC and Banco Santander - became a test of the fundamental principles of how competition law is applied to the card market. MasterCard failed to convince the court that the cross-border fees were "an objective necessity" to making the card system viable. The judges dismissed that the card system contributed to "technical and economic progress" and found the method of fee setting "tended to over-estimate the costs by the financial institutions." Javier Perez, president of MasterCard Europe, warned that if the ruling stood it would tip the balance of costs "decidedly against consumers." He argued that reducing fees might force consumers to lose benefits and pay more upfront for cards, while merchants would not pass on cost reductions. The commission sees this greater transparency as a benefit that will generate competition to reduce the hitherto hidden costs, which consumers eventually pay for in higher retail prices. This closely watched appeal related to so-called "interchange fees" on cross-border card payments, which a consumer's bank levies on a merchant's bank for retail sales transactions. But the implications are as significant for domestic fees. Christian Verschueren of EuroCommerce, a merchant association involved in the case, called on the commission "to follow this up with radical and decisive regulatory solutions to make payments in Europe truly competitive."