Brussels, 03/10/2007 (Agence Europe) - On 3 October, the European Commission fined Visa €10.2 million for serious infringement of the EC Treaty rules and the EEA agreement on restrictive business practices. From March 2000 to September 2006, Visa refused to admit Morgan Stanley as a member of its card payments network.
The Commission launched an investigation following receipt of a complaint from Morgan Stanley, whose subsidiary Morgan Stanley Bank had been refused membership of the Visa organisation in 2000. The Commission's investigation revealed that retailers expect banks to offer card acceptance contracts as a package including both Visa and MasterCard. Therefore, Visa's refusal to admit Morgan Stanley as a member not only prevented Morgan Stanley from providing services to merchants as regards Visa transactions (which represent about 60% of the market), but also as regards other payment card transactions. In the UK, the market for providing merchants with card acceptance capabilities (the so-called "acquiring" market) is highly concentrated and there is scope for further competition. 'Within the very narrow circle of possible entrants, Morgan Stanley is one of the few operators to actually have envisaged entry onto the UK acquiring market,' explains the Commission. Morgan Stanley had the necessary qualifications to operate efficiently on the market, according to the DG Competition investigation. 'Consequently, Morgan Stanley's entry into the UK acquiring market could be reasonably expected to contribute to more efficient competition in the UK,' but this was prevented by Visa for no objectively justifiable reason.
Visa Europe President and Chief Executive Peter Ayliffe announced that Visa was intending to appeal against the decision, but did not indicate the legal grounds for such an appeal. In a press release he explained that the matter had been settled between the parties and Morgan Stanley Dean Witter had withdrawn their complaint before the Commission decided to pursue the case: 'Visa Europe and the Commission need to maintain focus on the laudable goals of delivering SEPA, the Payment Services Directive, and the internal market in payments, rather than the Commission pursuing investigations on matters already resolved'. (cd)