Visa 2013 Annual Report Download - page 128

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2013
Tribunal’s Constitutional Chamber enjoin or annul the Commercial Chamber’s judgment, and either
rule directly on the merits of the Trademark Action or resubmit the cases to the Commercial Chamber
for a new decision on the merits. Visa filed an opposition to the plaintiff’s motion on October 29, 2013.
European Competition Proceedings
European Commission. On April 3, 2009, the European Commission (“EC”) 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 alleged a breach of Article 81 of the European Community Treaty and Article 53
of the European Economic Area Agreement (the “EEA Agreement”). The SO was directed to Visa Inc.
and Visa International with respect to the “honor all cards” rule, the “no-surcharge” rule, and certain
consumer card interchange fee practices.
On April 26, 2010, Visa Europe announced an agreement with the EC, subject to public
consultation, to end the proceedings with respect to Visa Europe’s debit interchange fees. After public
consultation, on December 8, 2010, the EC concluded that the proposed agreement with Visa Europe
addressed its competition concerns, made the agreement legally binding upon Visa Europe, and
closed its investigation with regard to interchange fees for consumer debit card transactions.
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. On March 8, 2013,
Visa Inc. and Visa International received a redacted version of the SSO. 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.
Visa Europe has offered commitments addressing domestic interchange, cross-border interchange
within Europe, cross-border acquiring within Europe, and other Visa Europe rules. The EC will consider
whether to accept those commitments after a period of public comment.
U.K. Merchant Litigation. On August 2, 2013, Visa Inc. and Visa International were served with
claims filed in the High Court of Justice Queen’s Bench Division Commercial Court in London on behalf
of eleven merchants in the supermarket, clothing, and other retail business. Visa Europe is also named
in the case. The claimants seek damages for alleged anti-competitive conduct relating to U.K.
domestic, Irish domestic, and intra-EEA interchange fees for credit and debit cards. The claimants also
assert that the alleged anticompetitive effects of interchange fees are reinforced by Visa Europe’s
“honor all cards” and “no discrimination” rules and rules limiting cross-border issuing and acquiring. On
October 16, 2013, Visa Inc. and Visa International were served with a similar claim by a twelfth
merchant that is represented by the same counsel as the other eleven merchants. The twelve
merchants seek damages exceeding $825 million. Previously, on March 22, 2013, Visa Inc. learned
that counsel for a separate group of merchant plaintiffs threatened to file litigation against Visa Europe,
Visa Inc., and Visa International with respect to interchange rates in Europe. On March 28, 2013, Visa
Europe, Visa Inc., and Visa International entered into (1) a standstill agreement with respect to those
merchants’ claims, and (2) a costs agreement, which preserved the then-current recoverability rules in
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