Visa has said that it will appeal a fine imposed by the EU for refusing to admit Morgan Stanley to its payment system in Britain. The Commission argued that the move was “unjustified and discriminatory”. EU anti-trust chief Neelie Kroes said that the decision would give a “clear signal” that the Commission will take a tough line to ensure competition in the payments sector.
The €10.2 million fine was issued by the Commission on 3 October after Visa blocked the US-based investment bank from the UK Visa payment network from 2000 to 2006.
Competition Commissioner Neelie Kroes said that Europe’s biggest credit card provider had “seriously violated” EU rules on restrictive business practices. The European competition authority reasoned that the move was unjustified as Morgan Stanley was not a competitor. And it also said that the move was discriminatory as other banks were admitted.
Moreover, the Commission argued that this had limited competition, resulting in a restriction in choice for UK retailers, who “were denied potential access to alternative suppliers of credit card acceptance services”.
European retailer’s association Eurocommerce said that the decision was “sending the right message”, and added that it was “optimistic” over further competition cases to come in autumn.
Visa responded by saying that it would appeal the decision, with President and CEO Peter Ayliffe stating: “We do not believe that Visa Europe infringed EU competition law.” Visa criticised the Commission for continuing to pursue the case even after Morgan Stanley had withdrawn its complaint after it was admitted in 2006.
“If the Commission is truly committed to competition in European payments it would be better prioritising its resources on the unresolved interchange issue, which threatens to curtail the growth of electronic payments to the detriment of all Europe’s businesses and consumers,” Ayliffe added.
With this first competition case following the retail banking sector inquiry, Kroes intends to “send a clear signal” that the Commission will take a tougher line on the opening of markets and ensuring competition in the area of payment cards (see EURACTIV 31/01/07).
She said: “The payment cards industry plays a key role in the creation and functioning of the single market for payments. The Commission will not tolerate anti-competitive behaviour and will intervene if companies are illegally refused membership of payment card networks.”