EU fines Visa €10.2 million for blocking Morgan Stanley
The European Union on Wednesday fined worldwide card-payment group Visa almost $15 million for refusing to let US bank Morgan Stanley into its network of members.
The refusal, which ran from March 2000 to September 2006, was made “without objective justification” and “restricted competition in the provision of credit-card acceptance services to merchants in the UK,” the European Commission - the EU executive - said in a statement. “The Commission will not tolerate anti-competitive behavior and will intervene if companies are illegally refused membership of payment card networks,” Competition Commissioner Neelie Kroes said. The fine of €10.2 million ($14.47 million) was imposed despite the fact that Visa and Morgan Stanley came to a deal in September 2006, the statement added. The case dates back to 2000, when Morgan Stanley’s British subsidiary, Morgan Stanley Bank, applied to join the Visa network. Visa rejected the application, saying that it could not accept a member whom Visa directors judged to be a competitor. The decision “not only prevented Morgan Stanley from providing services to merchants as regards Visa transactions, but also as regards other payment-card transactions,” the EC ruled.
Morgan Stanley therefore complained to the EC. An investigation concluded that Morgan Stanley was not a realistic competitor to Visa, and that the rule had been “applied in a discriminatory manner,” since other competitors had been allowed to join the Visa network. The EC presented a list of its objections to Visa in 2004. Subsequently, the company came to a deal with Morgan Stanley, and in 2006 allowed it to join the Visa group. The EC nevertheless decided to fine Visa, because it had shut Morgan Stanley out for over six years, including more than 2 years after the EC had presented its case, the statement read. (m&c.com)
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