Visa 2011 Annual Report Download - page 133

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2011
(in millions, except as noted)
In parallel to this proceeding, in December 2006, the plaintiff also filed a claim with the Fourth Commercial Court of First Instance of Caracas ("First
Instance court"), alleging that the defendants infringed the plaintiff's rights as the holder of the trademark registries and requesting declarative, injunctive and
monetary relief. On September 25, 2007, Visa's request for removal of the First Instance judge from the case was granted. A new judge was assigned to
finalize the discovery phase of the case. On February 11, 2010, the First Instance court dismissed in its entirety the plaintiff's claim against Visa and other
defendants for damages based on trademark infringement. The plaintiff appealed. On August 10, 2011, the appellate court overturned the First Instance court's
dismissal in part. The court refused to award plaintiff any damages or costs, but enjoined Visa and Todoticket from using the expression "Vale" in the
Venezuelan food voucher market.
Both August 10 rulings are subject to an extraordinary appeal to the Supreme Court.
U.S. Merchant Acceptance Rules Investigations. On October 10, 2008, the DOJ issued a Civil Investigative Demand, or "CID," to Visa U.S.A. that
sought information regarding a potential violation of Section 1 or 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. The CID sought documents, data and narrative
responses to several interrogatories and document requests, which focused on certain U.S. merchant acceptance practices, including major payment network
rules regarding merchant surcharging and merchants' ability to steer customers to other forms of payment. A multistate attorney general working group and
other state attorney general offices requested similar information from Visa Inc. in 2009.
On October 4, 2010, Visa announced a settlement with the DOJ and the attorneys general of seven states to resolve their investigations. Additional
states joined the settlement on December 20, 2010. As part of the settlement, Visa will allow U.S. merchants to offer discounts or other incentives to steer
customers to a particular form of payment including to a specific network brand or to any card product, such as a "non-reward" Visa credit card. Visa's rules
always have allowed U.S. merchants to steer customers to other forms of payment and offer discounts to customers who choose to pay with cash, check or
PIN debit. The new rules will expand U.S. merchants' ability to discount for their preferred form of payment, though they will not be able to pick and choose
amongst issuing banks. The settlement agreement does not address Visa's rule prohibiting U.S. merchants from surcharging consumers. Apart from a partial
reimbursement to some of the state attorneys general of their attorneys' fees and expenses, there is no monetary obligation associated with the settlement. The
reimbursement amount is not considered material to the consolidated financial statements.
The consent decree setting forth the terms of settlement was subject to court approval. After responding to public comments it received regarding the
consent decree, on July 14, 2011, the DOJ asked the court to enter final judgment "as soon as possible without further hearing." The settlement became final
on July 20, 2011, when the court entered final judgment approving the consent decree, and Visa has made the rule changes required by the settlement.
Venezuela Interchange Proceedings. On October 2, 2008, the Superintendencia para la Promoción y Protección de la Libre Competencia ("Competition
Authority") of Venezuela filed an administrative proceeding against "Visa Inc. International" (sic), MasterCard, American Express, Diners Club, Consorcio
Credicard, and more than thirty privately held financial institutions. The Competition Authority alleged that, among other things, the defendants' setting of
default interchange rates and merchant discount rates violated Venezuelan competition law. The Competition Authority sought
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