Visa 2010 Annual Report Download - page 25

Table of Contents
If the settlements of our currency conversion cases do not become final and we are unsuccessful in any of the various lawsuits relating to Visa
U.S.A.'s and Visa International's currency conversion practices, our business may be materially and adversely affected.
Visa U.S.A. and Visa International are defendants in several state and federal lawsuits alleging that their currency conversion practices are or were
deceptive, anti-competitive or otherwise unlawful.
On July 20, 2006, and September 14, 2006, Visa U.S.A. and Visa International entered into agreements to settle or otherwise dispose of these matters.
Under the settlement agreements, Visa U.S.A. paid approximately $100 million as part of the defendants' settlement fund for the federal actions and
approximately $19 million to fund settlement of the state cases. Although the federal court has granted final approval of the settlement agreements, the
settlements are subject to resolution of any appeals. If we are unsuccessful in any appellate proceeding, all of the agreements resolving the federal and state
actions will terminate. If that occurs and we are unsuccessful in defending against some or all of these lawsuits on the merits, we may have to pay restitution,
damages or both, and we may be required to modify our currency conversion practices. The potential amount of damages, restitution or both could be
substantial. In addition, although we have substantially changed the practices at issue in these litigations, court-ordered changes to our currency conversion
and cross-border transaction practices could materially and adversely affect our business. See Note 22—Legal Matters to our consolidated financial
statements included in Item 8 in this report.
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 large companies, we are a defendant in a number of civil actions and investigations alleging violations of competition/antitrust law,
securities law, consumer protection law, or intellectual property law, among others. These lawsuits and investigations have been initiated by a wide variety of
parties, including the U.S. Department of Justice, or the DOJ, U.S. state attorneys general, merchants, and consumers. Examples of such claims are described
more fully in Note 22—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.
In the United States, 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, monetary damages could be significant.
If we are unsuccessful in our defense against any material current or future proceedings, we may have to pay substantial damages, limit the fees we
charge or change other business practices. 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,
subject to court approval, with the Antitrust Division of the DOJ and a number of state attorneys general relating to their investigation of certain Visa
merchant acceptance practices. Under the agreement, Visa will allow U.S. merchants to offer discounts or other incentives to steer cardholders to a particular
form of payment including to a specific
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