Visa fined for competition abuse

Brussels said the fine sent a clear signal about protecting consumers

The European Commission has fined Visa 10.2m euros ($14.4m; £7m) for blocking Morgan Stanley from joining its European credit card payment network.

Preventing the US bank from offering payment services through its cards was "unjustified and discriminatory", EU competition regulators said.

It concluded the bank's exclusion from Visa's EU network between 2000 and 2006 forced up prices for consumers.

Visa said it did not believe it had broken the law and would appeal.

'Reduced choice'

The EU probe was triggered by a complaint from Morgan Stanley which the bank ultimately withdrew after it joined the Visa Europe network in the summer of 2006.

At the time, Visa argued that it could not admit Morgan Stanley because it owned the Discover credit card network in the US and therefore was a direct competitor.

Visa's behaviour prevented the competition that Morgan Stanley could have helped bring about Neelie Kroes, EU Competition Commissioner

But Commission officials concluded this did not apply since Discover did not operate in Europe and Visa had already admitted Citigroup, which owned the rival Diners Club network.

Visa's behaviour had a direct impact on Morgan Stanley, the Commission said, because it made its credit cards less attractive to retailers, particularly in the UK where Visa accounts for 60% of credit card transactions.

Morgan Stanley's involvement would have boosted currently limited competition in the credit card "acceptance market", regulators added, and reduced prices for customers.

"Visa's behaviour prevented the competition that Morgan Stanley could have helped bring about," said Neelie Kroes, the EU's Competition Commissioner.

"Visa's action reduced choice for UK retailers, which were denied potential access to alternative suppliers of credit card acceptance services."

'No precedent'

Visa Europe - which is owned by a consortium of more than 4,000 banks - criticised Brussels for pursuing the case after the two firms had reached agreement between themselves.

It said regulators should focus their energies instead on creating a functioning single market for credit card payments across Europe.

"We do not believe that Visa Europe infringed EU competition law," said Peter Ayliffe, Visa Europe's president and chief executive.

"There is no value as a precedent to this decision."