Legal Action against Visa in London, Brussels

Morgan Stanley Dean Witter & Co. (MSDW) has filed suit in the High Court in London against Visa International. There appear to be two main issues. First, MSDW is seeking damages because "Visa's exclusionary behavior effectively prevented MSDW from acquiring the U.K. and Canadian credit card business of Bank One because the transaction was subject to MSDW's obtaining membership in Visa." MSDW owns the Discover card network in the U.S. and issues MasterCards in the U.K., as well as the Discover card under a different name. Second, it argues that, while Discover has its own network in the U.S., MSDW does not operate a proprietary network in the U.K. or elsewhere in Europe. On the basis that it does not compete with Visa in those areas, MSDW is seeking an injunction to force Visa to admit it to membership.

Separately, in mid-October the European Union Commission sent a letter to Visa International that marked the start of formal proceedings against Visa for alleged restriction on competition. The issue in question involved interchange fees. The commission said the interchange fee charged for international operations "amounts to a collective price agreement which is restrictive of competition." Visa has about one month to respond to the commission's preliminary findings.