Visa 2009 Annual Report Download - page 121

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2009
(in millions, except as noted)
New Zealand Interchange Proceedings
The Commerce Commission, New Zealand's competition regulator, filed a civil Statement of Claim in the High Court in Wellington on November 9,
2006, alleging that, among other things, the fixing of default interchange rates by Cards NZ Limited, Visa International, MasterCard and certain Visa
International member financial institutions contravenes the New Zealand Commerce Act. On November 27, 2006, a group of New Zealand retailers filed a
nearly identical claim against the same parties before the same tribunal. Both the Commerce Commission and the retailers seek declaratory, injunctive and
monetary relief. Both cases were transferred to the commercial list at the High Court in Auckland in April 2007.
The Commerce Commission, Visa International and Visa Worldwide Pte Ltd settled the Commerce Commission case on August 11, 2009, and the
court granted leave to discontinue the claim on August 26, 2009. On October 3, 2009, Visa and the New Zealand retailers entered into an agreement to settle
the retailers' case, and the retailers filed a notice of discontinuance on October 7, 2009. The terms of the settlements are not considered material to the
consolidated financial statements.
Currency Conversion Litigation
In 2000, a "representative" action was filed in California state court against Visa U.S.A. and Visa International in connection with an asserted 1%
currency conversion "fee" assessed on member financial institutions by the payment card networks on transactions involving the purchase of goods or services
in a foreign currency and the disclosure of that fee (Schwartz). Plaintiffs claimed Visa's currency conversion practices violated California Business &
Professions Code Section 17200. Additional California state class actions were filed against Visa U.S.A. and Visa International challenging currency
conversion practices (Shrieve, Mattingly, and Baker). Visa U.S.A., Visa International, MasterCard, Citicorp Diners Club, Inc. (Diners Club) and several Visa
member financial institutions are also defendants in a number of federal class actions that allege, among other things, violations of federal antitrust laws based
on the 1% currency conversion fee. The federal complaints were consolidated or coordinated in MDL 1409 (In re Currency Conversion Fee Antitrust
Litigation) in the U.S. District Court for the Southern District of New York.
On July 20, 2006, Visa U.S.A. and Visa International entered into a settlement agreement in MDL 1409. Under the terms of that settlement, Visa
U.S.A. and Visa International paid $100.1 million into a settlement fund and agreed that for five years they would separately identify or itemize any fees
added to transactions because they occurred in a foreign country or involved a foreign currency and would require U.S. issuing members to disclose certain
changes, if any, to exchange rate practices. Visa U.S.A. and Visa International also paid into the settlement fund $18.6 million in attorneys' fees to resolve
Schwartz. The Shrieve, Mattingly, and Baker plaintiffs agreed that they would ask the court to dismiss their actions with prejudice as to Visa U.S.A. and Visa
International once the MDL 1409 settlement receives court approval. If Baker is dismissed, Visa U.S.A. and Visa International shall pay $1.0 million plus
interest as attorneys' fees. If Baker is not dismissed within 60 days of final approval of the MDL settlement, Visa U.S.A. and Visa International shall pay
$500,000 plus interest as attorneys' fees.
The court granted final approval of the MDL 1409 settlement on October 22, 2009. One or more objectors may appeal the court's ruling.
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