European Commission Fines Visa £10.2 million

03 Oct 2007

On 3rd October 2007 the European Commission fined Visa for infringing Art 81 of the EC Treaty and Art 53 of the EEA Agreement.

In 2000 Morgan Stanley complained to the Commission about Visa’s refusal to admit Morgan Stanley Bank (“MSB”) in the UK as a member of Visa.  Visa followed an internal rule of not admitting an applicant which is deemed to be a competitor.

The Commission’s investigation considered this to be a restriction in competition as MSB’s card operations in the EU were confined to issuing MasterCard cards in the UK and its entry into the UK acquiring market (i.e. provision of card acceptance capabilities to retailers) could be expected to have contributed to more efficient competition.  The investigation concluded that it was not a competitor of Visa as it had no payment card network in the EU and that it would be highly unlikely that Discover, Morgan Stanley’s US card network, would expand in the EU given the high entry barriers.

Furthermore, the Commission argued that this rule was also discriminatory as Visa admitted Citigroup and several shareholders of JCB Co Ltd.

A settlement was agreed in 2006 following which MSB withdrew its complaint and was admitted as a Visa member.  Despite this, the Commission decided to impose a fine as Morgan Stanley was excluded for the UK acquiring market for over 6 years.

Visa Europe has indicated that it intends to appeal the decision.

Rupert Anderson QC was part of the legal team for Morgan Stanley and Anneli Howard was junior counsel to Visa.

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