[JURIST] The European Commission [official website] on Tuesday stated [press release, PDF] that Visa Europe, a subsidiary of Visa, Inc. [corporate websites], has breached EU antitrust laws. Visa Europe imposes multilateral interchange fees (MIFs) that retailers must pay for accepting Visa’s payment cards from consumers. The Commission said that such fees have a restrictive effect on competition and business. The EU Competition Commissioner Joaquin Almunia [official website] announced in the supplementary statement of objections that the Commission has reached a preliminary conclusion finding that “Visa’s MIFs harm competition between acquiring banks, inflate the cost of payment card acceptance for merchants and ultimately increase consumer prices.” Visa thereby breached Article 101 of the Treaty on the Functioning of the EU (TFEU) [text, PDF] and Article 53 of the European Economic Area (EEA) [text, PDF] Agreement. The two articles prohibits “cartels and restrictive business practices. The supplementary statement of objection came a week after Almunia announced [Reuters report] that the Commission was preparing the document. Visa had already received [press release] a statement of objection in April 2009 stating that the company’s MIFs restricted competition between banks for accepting debit and credit cards without benefiting consumers.
Visa is not the only financial institution that faces sanctions and other litigation. Last week, JPMorgan Chase [corporate website; JURIST news archive] agreed [JURIST report] to a $100 million settlement in a case accusing that the company increased monthly minimum payments for credit card holders from two percent to five percent in 2008 and 2009 to profit from higher fees. The settlement which was filed with the US District Court for the Northern District of California [official website] has still be approved by a judge. Bank of America (BOA) also agreed to pay $375 million in a settlement with bond insurer Syncora Guarantee [corporate websites] that accused the bank of misleading it into insuring toxic mortgage-backed securities of BOA-owned Countrywide Financial Corporation [NYT backgrounder]. In China, a Hong Kong judge ruled against Deutsche Bank AG [corporate website] on a motion to dismiss developer Tin Lik’s rental fraud lawsuit. Lik claimed that during his sale of the Gateway Plaza in Beijing to Deutsche Bank’s RREEF China Commercial Trust in 2007, he was forced to pay a shortfall of HK $279 million (US $36 million) in rental fraud.