Visa 2014 Annual Report Download - page 139

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2014
Interchange Opt-out Litigation
Beginning in May 2013, more than 35 opt-out cases have been filed by hundreds of merchants in
various federal district courts, generally pursuing damages claims on allegations similar to those raised
in MDL 1720. A number of the cases also include allegations that Visa has monopolized, attempted to
monopolize, and/or conspired to monopolize debit card-related market segments, and one of the cases
seeks an injunction against the fixed acquirer network fee. The cases name as defendants Visa Inc.,
Visa U.S.A., Visa International, MasterCard Incorporated, and MasterCard International Incorporated,
although some also include certain U.S. financial institutions as defendants. Wal-Mart Stores Inc. and
its subsidiaries have filed an opt-out complaint that also adds Visa Europe Limited and Visa Europe
Services Inc. as defendants. Visa has acknowledged and confirmed its obligations to indemnify Visa
Europe Limited and Visa Europe Services Inc. with respect to the claim against them in Wal-Mart’s
complaint.
Visa, MasterCard, and certain U.S. financial institution defendants in MDL 1720 filed a complaint
in the Eastern District of New York against certain named class representative plaintiffs who had opted
out or stated their intention to opt out of the damages portion of the Settlement Agreement. In addition,
Visa filed three more similar complaints in the Eastern District of New York against Wal-Mart Stores
Inc.; against The Home Depot, Inc. and Home Depot U.S.A.; and against Sears Holdings Corporation.
All four complaints seek a declaration that, from January 1, 2004 to November 27, 2012, the time
period for which opt-outs may seek damages under the Settlement Agreement, Visa’s conduct in,
among other things, continuing to set default interchange rates, maintaining its “honor all cards” rule,
enforcing certain rules relating to merchants, and restructuring itself, did not violate federal or state
antitrust laws.
Visa and the other defendants in the opt-out cases in MDL 1720 filed a motion to dismiss the
then-pending opt-out complaints in MDL 1720. Wal-Mart and the named class representatives that are
defendants in the declaratory judgment cases in MDL 1720 filed motions to dismiss the declaratory
judgment complaints, and Visa filed a motion to dismiss Wal-Mart’s complaint. All of these motions to
dismiss were denied.
All the cases filed in federal court have been either assigned to the judge presiding over MDL
1720, or have been transferred by the Judicial Panel on Multidistrict Litigation for inclusion in MDL
1720. The court has entered an order confirming that In re Payment Card Interchange Fee and
Merchant Discount Antitrust Litigation, 1:05-md-01720-JG-JO (E.D.N.Y.), includes (1) all current and
future actions transferred to MDL 1720 by the Judicial Panel on Multidistrict Litigation or other order of
any court for inclusion in coordinated or pretrial proceedings, and (2) all actions filed in the Eastern
District of New York that arise out of operative facts as alleged in the cases subject to the transfer
orders of the Judicial Panel on Multidistrict Litigation. Cases that are transferred to or
otherwise included in MDL 1720 are covered litigation for purposes of the retrospective responsibility
plan. See Note 3—Retrospective Responsibility Plan.
Visa has reached settlement agreements with a number of merchants representing approximately
10% of the Visa-branded payment card sales volume of merchants who opted out. The amount of the
settlements is not considered material to the consolidated financial statements.
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