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VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2014
On July 31, 2012, the EC announced a supplementary Statement of Objections (“SSO”) that was
sent to Visa Europe concerning interchange for consumer credit card transactions; and, on March 8,
2013, a redacted version of the SSO was served on Visa Inc. and Visa International. The SSO alleges
a breach of Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the
EEA Agreement. Among other things, the SSO asserts claims jointly against Visa Europe, Visa Inc.,
and Visa International, objecting to domestic, cross-border, and inter-regional interchange, Visa
Europe’s rules relating to cross-border acquiring, and Visa Europe’s point of sale rules. The SSO also
announces the EC’s intention to impose fines. The potential amount of any fine cannot be estimated at
this time.
On February 26, 2014, the EC adopted a formal decision accepting Visa Europe’s commitments
addressing domestic interchange, cross-border interchange for credit card transactions within Europe,
and cross-border acquiring within Europe, and made the commitments legally binding on Visa Europe.
The EC continues the proceedings in respect of inter-regional interchange fees that apply to
transactions involving a Visa credit cardholder from outside the Visa Europe territory and a merchant in
the European Economic Area (EEA). These interchange fees are set by Visa Inc.
U.K. Merchant Litigation. Since July 2013, approximately 20 merchants (together with subsidiary/
affiliate companies) have commenced proceedings against Visa Europe (used in this U.K. Merchant
Litigation section to denote Visa Europe Limited and/or relevant subsidiary/affiliate companies), Visa
Inc. and Visa International relating to interchange rates in Europe, and seek damages for alleged
anti-competitive conduct primarily in relation to U.K. domestic and/or Irish domestic and/or intra-EEA
interchange fees for credit and debit cards. After a successful application for summary judgment, the
claims of most merchants were limited to the 6 year period immediately preceding the issuance of each
claim. These merchants intend to apply for permission to appeal.
In addition, since March 2013, approximately 20 additional merchants (together with subsidiary/
affiliate companies) have threatened to commence proceedings against Visa Europe, Visa Inc. and
Visa International with respect to interchange rates in Europe. Visa Europe, Visa Inc., and Visa
International entered into standstill agreements with respect to a majority of those merchants’ claims.
While the amount of interchange being challenged could be substantial, these claims have not yet
been filed and their full scope is not yet known.
Altogether, therefore, merchants accounting for more than 50% of U.K. retail sales have either
filed claims or preserved their right to do so. The amount of interchange being challenged is
substantial. Although not all of the merchant claims have been served and thus the full scope of the
claims is not yet known, and there are substantial defenses to these claims, the total damages sought
in the claims that have been served exceed several billion dollars.
Visa Europe is obligated to indemnify Visa Inc. and Visa International in connection with the
European Competition Proceedings, in our opinion, including payment of any fines or damages that
may be imposed. However, Visa Europe has informed Visa Inc. of its position that it is not obligated to
indemnify Visa Inc. or Visa International for any claim in the European Competition Proceedings,
including claims asserted in either the European Commission matter or the filed or unfiled claims in the
U.K. Merchant Litigation. Visa Inc. continues to firmly believe that Visa Europe is obligated to indemnify
for all such claims. While the parties are not currently in non-binding arbitration, both parties have
initiated the executive engagement aspect of the dispute resolution procedure contemplated by the
Framework Agreement to resolve their dispute regarding this indemnification issue.
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