Visa 2010 Annual Report Download - page 132

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2010
(in millions, except as noted)
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 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 is subject to court approval. Visa will make formal rule changes after the court enters a final
judgment following a public comment period, but will refrain from enforcing its current discounting rules in the interim.
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 alleges that, among other things, the defendants' setting of
default interchange rates and merchant discount rates violates Venezuelan competition law. The Competition Authority seeks monetary and injunctive relief.
The evidentiary phase of the investigation has concluded, but the Competition Authority has not yet issued any findings as a result of the investigation.
European Interchange Proceedings. On April 3, 2009, the European Commission issued a Statement of Objections ("SO") to Visa Europe, Visa
International and Visa Inc. alleging a breach of European competition law. Visa Inc. and Visa International were served with the Statement of Objections on
June 1, 2009. The SO alleges a breach of Article 81 of the EC Treaty and Article 53 of the EEA Agreement. The SO is directed to Visa Inc. and Visa
International as to Honor All Cards, the no-surcharge rule and what the Commission alleges is the "subsidiary application of the Inter-Regional MIFs to the
intra-regional POS transactions with consumer cards." On August 10, 2009, Visa Inc. and Visa International filed a response to the SO. On April 26, 2010,
Visa Europe announced an agreement with the European Commission, subject to public consultation, to end the proceedings initiated by the Statement of
Objections issued April 3, 2009, with respect to Visa Europe's immediate debit interchange fees. Pursuant to existing agreements among the parties, Visa
Europe is obligated to indemnify Visa International and Visa Inc. in connection with this proceeding, including payment of any fines that may be imposed.
Canadian Competition Bureau Proceedings. On April 21, 2009, Visa received an oral notification from the Canadian Competition Bureau that it has
initiated a civil inquiry regarding interchange and certain of Visa policies relating to merchant acceptance practices. On August 4, 2010, the Bureau issued a
voluntary draft information request to Visa seeking information on certain merchant acceptance practices, interchange (including the setting of default
interchange), and fees paid by issuers and acquirers to Visa. Visa is cooperating with the Bureau with respect to the information request.
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