MasterCard Inc. asked the European Union’s highest court to overturn a regulatory decision on transaction fees that ended its ability to set rates on cross- border credit-card payments.

MasterCard is challenging an EU decision that forces it to maintain reduced rates for the transaction fees that are paid by retailers. The EU court’s ruling, which will be final, will set a precedent for card payment systems in Europe.

“The effect of the commission’s decision is to require MasterCard issuers to continue to provide valuable services to merchants such as guaranteeing payment to them without being able to recover any revenues from those merchants for those services,” Thomas Sharpe, a lawyer for MasterCard, told the EU Court of Justice in Luxembourg July 4.

EU regulators have targeted credit- and debit-card fees for a decade and this year started a probe into Purchase, New York- based MasterCard’s charges on foreign card payments such as when tourists go shopping in the 28-nation bloc. Visa Europe Ltd., operator of the EU’s largest payment-card network, proposed a settlement of a similar case that is being reviewed by the European Commission.

The EU General Court, the bloc’s second-highest tribunal, last year backed the European Commission’s 2007 decision that MasterCard’s levies unfairly inflated the transaction fees paid by retailers for processing payments.

“If we win this case, we would be free to set any fees we want,” Carl Munson, MasterCard’s associate general counsel, said in an interview after the hearing.

While MasterCard agreed in 2009 to fee changes as part of a settlement with the Brussels-based EU regulator to avoid a daily penalty of as much as 3.5 percent of sales, it asked the court to overturn the EU antitrust agency’s findings.

The case hinges to a large extent on the argument that there is no longer an “association of undertakings” between MasterCard, which was once owned by 1,400 financial institutions, and banks since it underwent a “radical” transformation when the company went public in 2006.

The lower EU court’s interpretation that there is such an association is “quite dangerous,” Bernard Amory, another MasterCard lawyer, said July 4.

“MasterCard must act in the interests of its shareholders, not the banks,” Amory said. “That is by law.”

MasterCard’s appeal is supported by HSBC Holdings Plc, Royal Bank of Scotland Group Plc and the Lloyds Banking Group Plc.

“Not only do the banks play no part whatsoever in the decisions since the IPO, but there’s also no commonality of interest,” said James Flynn, a lawyer for Lloyds. “MasterCard simply makes these decisions and announces them to the Lloyds banking group and other issuers.”

Retailers who back the EU decision have long fumed about the cost of taking plastic. Unlike with checks, banks charge them fees, known as interchange, to process debit- and credit- card payments. The amounts are set by MasterCard and Visa, which own the payment networks and pass the money to the banks.

The multilateral interchange fee “is in reality an additional cost of business that must be borne by retailers themselves and ultimately by their consumers,” Aidan Robertson, a lawyer for the British Retail Consortium, told the court.

Paolo Mengozzi, an advocate general at the EU court, said he will issue his non-binding opinion, which the court usually follows, by Nov. 27.

The case is: C-382/12 P MasterCard and Others v. Commission.

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