Visa 2015 Annual Report Download - page 140

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2015
In California, the consolidated Credit/Debit Card Tying Cases were resolved pursuant to a revised
settlement agreement that received final approval and was affirmed on appeal. Certain objectors filed
petitions for rehearing and for review by the California Supreme Court that were denied on
February 11, 2015, and the judgment approving the settlement agreement is now final. One objector
has appealed the trial court’s orders regarding the distribution of certain settlement funds, and the
denial of that objector’s motion for attorneys’ fees and costs.
Canadian Competition Proceedings
Merchant Litigation. Beginning in December 2010, a number of putative class action lawsuits were
filed in Quebec, British Columbia, Ontario, Saskatchewan, and Alberta against Visa Canada,
MasterCard, and ten financial institutions on behalf of purported classes of merchants and others that
accept payment by Visa and MasterCard. In Saskatchewan, a separate action was filed against Visa
Canada Corporation and Visa Inc., two MasterCard entities, and a number of smaller Canadian issuing
banks that are not named as defendants in any of the existing proceedings. The lawsuits allege a
violation of Section 45 of Canada’s Competition Act and assert claims of civil conspiracy, interference
with economic interests, and unjust enrichment, among others. Plaintiffs allege that Visa and
MasterCard each conspired with their member financial institutions to set supra-competitive default
interchange rates and merchant discount fees, and that Visa and MasterCard’s respective “no-
surcharge” and “honor all cards” policies had the anticompetitive effect of increasing merchant discount
fees. Three of the named financial institutions, which are not significant Canadian issuers, have
entered into settlement agreements with the plaintiffs, subject to court approval.
On March 26, 2014, the British Columbia Supreme Court, in Watson v. Bank of America Corporation,
et al., granted the plaintiffs’ application for class certification in part, allowing plaintiffs to proceed as a class
on claims for price fixing under Canada’s Competition Act, among other claims. On appeal by both plaintiff
and defendants, the British Columbia Court of Appeal permitted the class to proceed with its price-fixing and
other claims, while striking out certain claims and ordering reconsideration of certification as it relates to one
of the bank defendants. The lawsuits in Quebec, Ontario, Alberta, and Saskatchewan are effectively stayed
pending further proceedings in the British Columbia lawsuit.
The pending Canada Merchant Litigation lawsuits largely seek unspecified monetary damages
and injunctive relief, but some allege substantial damages.
Dynamic Currency Conversion
On February 4, 2013, the Australian Competition and Consumer Commission (“ACCC”)
commenced proceedings in the Federal Court of Australia against several Visa entities asserting
violations of Australian competition law based on allegations of restrictions on dynamic currency
conversion (DCC) services on Visa international payment card transactions at certain Australian
merchant outlets from May 2010 to October 2010, and on DCC services on cash withdrawals using
Visa international payment cards at Australian ATMs.
The parties reached an agreement to resolve the proceedings. Pursuant to the settlement, on
September 4, 2015, the court ordered Visa to pay a pecuniary penalty of AUD$18 million and costs of
AUD$2 million based on a single contravention of section 47(2) of the Competition and Consumer Act
2010 (Cth) for conduct concerning certain Australian merchant outlets from May to October 2010. The
court dismissed all other claims asserted by the ACCC.
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