Visa 2011 Annual Report Download - page 24

Table of Contents
The Visa portion of a settlement or judgment covered by the omnibus agreement would be allocated in accordance with specified provisions of our
retrospective responsibility plan. Failure of our retrospective responsibility plan to insulate us adequately from the impact of such settlements or judgments
could result in a material adverse effect on our financial condition and cash flows and could even cause us to become insolvent. Even if our retrospective
responsibility plan covered our monetary liabilities, settlements or judgments in the interchange litigation could have a material adverse effect on our results
of operations. In addition, settlements or judgments in the interchange litigation could include restrictions on our ability to conduct business, which could
increase our cost of doing business and limit our prospects for future growth.
The retrospective responsibility plan addresses only the covered litigation. The plan does not cover other pending litigation or any litigation that we
may face in the future, except for cases that include claims for damages relating to the period prior to our initial public offering that are transferred for pre-
trial proceedings or otherwise included in the interchange litigation. In addition, our retrospective responsibility plan covers only the potential monetary
liability from settlements of, or judgments in, the covered litigation. Non-monetary settlement terms and judgments in the covered litigation may require us to
modify the way we do business in the future. This could adversely affect our revenues, increase our expenses and/or limit our prospects for growth. Therefore,
even if our retrospective responsibility plan provides us with adequate funding to satisfy our monetary obligations with respect to settlements of, and
judgments in, the covered litigation, it may not insulate us from all potential adverse consequences of them.
If we are found liable in certain other pending or future lawsuits, we may have to pay substantial damages or change our business practices or
pricing structure, which may have a material, adverse effect on our financial condition and results of operations.
Like many other large companies, we are a defendant in a number of civil actions and investigations alleging violations of competition/antitrust law,
consumer protection law, or intellectual property law, among others. Examples of such claims are described more fully in Note 21—Legal Matters to our
consolidated financial statements included in Item 8 in this report. Some lawsuits involve complex claims that are subject to substantial uncertainties and
unspecified damages; therefore, we cannot ascertain the probability of loss or estimate the damages. Accordingly, we have not established allowances for such
legal proceedings.
Private plaintiffs often seek class action certification in cases against us. This is particularly so in cases involving merchants and consumers, due to the
size and scope of our business. If we are found liable in a large class action lawsuit, such as the United States or Canadian merchant class action lawsuits,
monetary damages could be significant. See Note 21—Legal Matters to our consolidated financial statements included in Item 8 in this report.
If we are unsuccessful in our defense against any material current or future legal proceedings, we may have to pay substantial damages. We may also
have to change our business practices, including by limiting interchange reimbursement fees and by revising our rules about fees charged to consumers who
choose to pay with Visa. This could limit our payments volume and result in a material and adverse effect on our revenues, results of operations, cash flow,
financial conditions, prospects for future growth and overall business and could even cause us to become insolvent.
Limitations on our business that resulted from litigation may materially and adversely affect our revenues and profitability.
Certain limitations have been placed on our business in recent years because of litigation. For example, in October 2010, we reached a settlement with
the U.S. Department of Justice, or the DOJ,
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