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Friday, July 12, 2024 | Back issues
Courthouse News Service Courthouse News Service

EU Court Won’t Cut Visa Slack on $15 Million Fine

(CN) - A European court upheld a nearly $15 million fine against Visa for excluding Morgan Stanley, the previous owner of Discover Financial Services, from its international payment-card network.

The General Court of the European Union backed the European Commission in levying a fine for anti-competitive practices against the international and European branches of the credit card giant.

Visa had refused for more than six years to accept Morgan Stanley into its EU network, which allows merchants to make credit and deferred debit card transactions.

An agreement in September 2006 ended the standoff, but not before Morgan Stanley filed a complaint with the European Commission. Although the New York-based company eventually withdrew its complaint, the commission fined Visa International and Visa Europe almost $15 million for excluding Morgan Stanley from the United Kingdom market.

Visa appealed to the Luxembourg-based General Court, arguing that Morgan Stanley could have made a "fronting agreement" allowing it to bypass the exclusion.

The General Court said this would have been difficult. The court said that for promoting free markets, case law requires a look at potential competition as well as existing competition. Morgan Stanley was indeed a potential competitor, the court concluded.

The inclusion of a new credit card player would have helped the market away from its trend toward consolidation, the court added.

Visa can still appeal to the Court of Justice, the European Union's supreme legal authority.

Discover became an independent company in 2007.

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