Visa 2015 Annual Report Download - page 138

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2015
of the Judicial Panel on Multidistrict Litigation. Cases that are transferred to or otherwise included in MDL
1720 are U.S. covered litigation for purposes of the U.S. retrospective responsibility plan. See Note 3—
U.S. Retrospective Responsibility Plan and Potential Visa Europe Liabilities.
Visa has reached a settlement agreement with Wal-Mart Stores Inc. and its subsidiaries, which will
terminate if, following all appeals, the MDL class settlement is reversed or vacated with respect to
certification of the Rule 23(b)(2) settlement class or the consideration provided to or release provided
by that class. Including this settlement with Wal-Mart, as of the date of filing, Visa has reached
settlement agreements with a number of merchants representing approximately 48% of the Visa-
branded payment card sales volume of merchants who opted out.
On December 23, 2014, a similar case was filed in New Mexico state court by New Mexico’s
attorney general on behalf of the state, state agencies, and citizens of the state, generally pursuing
claims on allegations similar to those raised in MDL 1720. On May 15, 2015, defendants filed a partial
motion to dismiss, which was granted in part and, among other things, narrowed the state antitrust
damages claims.
While the Company believes that it has substantial defenses in these matters, the final outcome of
individual legal claims is inherently unpredictable. The Company could incur judgments, enter into
settlements or revise its expectations regarding the outcome of individual opt-out claims, and such
developments could have a material adverse effect on our financial results in the period in which the
effect becomes probable and reasonably estimable.
European Competition Proceedings
European Commission. Following the European Commission’s (“EC”) issuance in 2009 of a
Statement of Objections, the EC announced a supplementary Statement of Objections (“SSO”) on
July 31, 2012, 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, and Visa
Europe’s cross-border acquiring and 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 in the
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