# C_2011079EN.01000801.xml

| 12.3.2011 | EN | Official Journal of the European Union | C 79/8 |
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12.3.2011

EN

Official Journal of the European Union

C 79/8

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Summary of Commission Decision

of 8 December 2010

relating to a proceeding under Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA Agreement

(Case COMP/39.398 — VISA MIF)

(notified under document C(2010) 8760 final)

(Only the English text is authentic)

(Text with EEA relevance)

2011/C 79/05

On 8 December 2010, the Commission adopted a decision relating to a proceeding under Article 101 of the Treaty on the Functioning of the European Union. In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003
   (1), the Commission herewith publishes the names of the parties and the main content of the decision, including any penalties imposed, having regard to the legitimate interest of undertakings in the protection of their business secrets.

On 8 December 2010, the Commission adopted a decision relating to a proceeding under Article 101 of the Treaty on the Functioning of the European Union. In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003

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the Commission herewith publishes the names of the parties and the main content of the decision, including any penalties imposed, having regard to the legitimate interest of undertakings in the protection of their business secrets.

| (1) | The case concerns the multilateral interchange fees (‘MIFs’) set by Visa Europe limited (‘Visa Europe’), Visa Inc. and Visa International Services Association applicable to cross-border and certain domestic (2) point of sale transactions with VISA, VISA Electron and V PAY consumer payment cards within the EEA. |
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(1)

The case concerns the multilateral interchange fees (‘MIFs’) set by Visa Europe limited (‘Visa Europe’), Visa Inc. and Visa International Services Association applicable to cross-border and certain domestic (2) point of sale transactions with VISA, VISA Electron and V PAY consumer payment cards within the EEA.

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1.   PRELIMINARY COMPETITION CONCERNS

PRELIMINARY COMPETITION CONCERNS

| (2) | On 3 April 2009, the Commission adopted a Statement of Objections against Visa Europe Limited (‘Visa Europe’), Visa Inc. and Visa International Services Association. The Statement of Objections constitutes a preliminary assessment within the meaning of Article 9(1) of Regulation (EC) No 1/2003. |
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(2)

On 3 April 2009, the Commission adopted a Statement of Objections against Visa Europe Limited (‘Visa Europe’), Visa Inc. and Visa International Services Association. The Statement of Objections constitutes a preliminary assessment within the meaning of Article 9(1) of Regulation (EC) No 1/2003.

| (3) | As regards Visa Europe, in the Statement of Objections the Commission came to the provisional conclusion that Visa Europe had infringed Article 101 of the Treaty and Article 53 of the EEA Agreement when setting the MIFs applicable to cross-border and certain domestic point of sale transactions with VISA, VISA Electron and V PAY consumer payment cards within the EEA. |
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(3)

As regards Visa Europe, in the Statement of Objections the Commission came to the provisional conclusion that Visa Europe had infringed Article 101 of the Treaty and Article 53 of the EEA Agreement when setting the MIFs applicable to cross-border and certain domestic point of sale transactions with VISA, VISA Electron and V PAY consumer payment cards within the EEA.

| (4) | Interchange fees are in effect paid by a merchant's bank (‘acquirer’) to a cardholder's bank (‘issuer’) for each transaction made at a merchant outlet with a payment card. When a cardholder uses a payment card to buy goods or services from a merchant, the merchant in effect pays a merchant service charge to its acquirer. The acquirer keeps part of this charge (the acquirer's margin), part is passed on to the issuer (the MIF) and a small part is passed to the scheme operator (in this case Visa). In practice, a large part of the merchant service charge is determined by the MIF. |
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(4)

Interchange fees are in effect paid by a merchant's bank (‘acquirer’) to a cardholder's bank (‘issuer’) for each transaction made at a merchant outlet with a payment card. When a cardholder uses a payment card to buy goods or services from a merchant, the merchant in effect pays a merchant service charge to its acquirer. The acquirer keeps part of this charge (the acquirer's margin), part is passed on to the issuer (the MIF) and a small part is passed to the scheme operator (in this case Visa). In practice, a large part of the merchant service charge is determined by the MIF.

| (5) | The Statement of Objections expressed a concern that the MIFs have as their object and effect an appreciable restriction of competition in the acquiring markets to the detriment of merchants and indirectly their customers. The MIFs appeared to inflate the base on which acquirers set merchant service charges by creating an important cost element common to all acquirers. According to the Commission's preliminary view, Visa Europe's MIFs are not objectively necessary. The restrictive effect in the acquiring markets is further reinforced by the effect of the MIFs on the network and issuing markets as well as by other network rules and practices (Honour All Cards Rule (‘HACR’), No Discrimination Rule (‘NDR’), blending and application of different MIFs to cross-border as opposed to domestic acquirers). Furthermore, according to the Statement of Objections, the MIFs do not appear to meet the requirements for receiving an exception under Article 101(3) TFEU of producing efficiencies with a fair share of the resulting benefit being passed on to consumers. |
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(5)

The Statement of Objections expressed a concern that the MIFs have as their object and effect an appreciable restriction of competition in the acquiring markets to the detriment of merchants and indirectly their customers. The MIFs appeared to inflate the base on which acquirers set merchant service charges by creating an important cost element common to all acquirers. According to the Commission's preliminary view, Visa Europe's MIFs are not objectively necessary. The restrictive effect in the acquiring markets is further reinforced by the effect of the MIFs on the network and issuing markets as well as by other network rules and practices (Honour All Cards Rule (‘HACR’), No Discrimination Rule (‘NDR’), blending and application of different MIFs to cross-border as opposed to domestic acquirers). Furthermore, according to the Statement of Objections, the MIFs do not appear to meet the requirements for receiving an exception under Article 101(3) TFEU of producing efficiencies with a fair share of the resulting benefit being passed on to consumers.

2.   COMMITMENT DECISION

COMMITMENT DECISION

| (6) | Visa Europe offered commitments pursuant to Article 9 of Regulation (EC) No 1/2003 to meet the Commission’s competition concerns in the segment of immediate debit cards. |
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(6)

Visa Europe offered commitments pursuant to Article 9 of Regulation (EC) No 1/2003 to meet the Commission’s competition concerns in the segment of immediate debit cards.

| (7) | On 28 May 2010 a notice was published in the Official Journal of the European Union pursuant to Article 27(4) of Regulation (EC) No 1/2003, summarising the case and the proposed commitments and inviting interested third parties to give their observations on the commitments within one month following publication. On 23 July 2010 the Commission informed Visa Europe of the observations received from interested third parties following the publication of the notice. On 10 September 2010, Visa Europe submitted revised commitments. |
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(7)

On 28 May 2010 a notice was published in the Official Journal of the European Union pursuant to Article 27(4) of Regulation (EC) No 1/2003, summarising the case and the proposed commitments and inviting interested third parties to give their observations on the commitments within one month following publication. On 23 July 2010 the Commission informed Visa Europe of the observations received from interested third parties following the publication of the notice. On 10 September 2010, Visa Europe submitted revised commitments.

Official Journal of the European Union

| (8) | By decision of 8 December 2010, pursuant to Article 9 of Regulation (EC) No 1/2003, the Commission made the revised commitments binding on Visa Europe for four years. The main content of the commitments is summarised below.






  (a) | Visa Europe commits to cap its yearly weighted average cross-border MIFs applicable to transactions with its consumer immediate debit cards at 20 basis points (0,2 %) two months following the notification of the commitment decision to Visa Europe. The cap will also apply separately in each of those EEA countries for which Visa Europe directly sets specific domestic consumer immediate debit MIF rates and in those EEA countries where the cross-border MIF rates apply in the absence of other MIFs. |
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(8)

By decision of 8 December 2010, pursuant to Article 9 of Regulation (EC) No 1/2003, the Commission made the revised commitments binding on Visa Europe for four years. The main content of the commitments is summarised below.

(a)

Visa Europe commits to cap its yearly weighted average cross-border MIFs applicable to transactions with its consumer immediate debit cards at 20 basis points (0,2 %) two months following the notification of the commitment decision to Visa Europe. The cap will also apply separately in each of those EEA countries for which Visa Europe directly sets specific domestic consumer immediate debit MIF rates and in those EEA countries where the cross-border MIF rates apply in the absence of other MIFs.

| (b) | The weighted average cap can be modified by the Commission in agreement with Visa Europe if more reliable data for calculating the Immediate Debit weighted average MIF rate based on the Merchant Indifference Test (‘MIT’) becomes available, for example following the completion of the Commission's study on costs and benefits to merchants of accepting different payment methods. |
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(b)

The weighted average cap can be modified by the Commission in agreement with Visa Europe if more reliable data for calculating the Immediate Debit weighted average MIF rate based on the Merchant Indifference Test (‘MIT’) becomes available, for example following the completion of the Commission's study on costs and benefits to merchants of accepting different payment methods.

| (c) | In addition, Visa Europe commits to continue to implement and to further improve the transparency measures that were introduced by the Visa Europe Board in March 2009. In particular, the commitments provide for the unblending of merchant service charges, the registration and publication of all MIF rates, the full visibility and the electronic identification of commercial cards, the unbundling of acquirers, and the possibility for merchants to freely choose to accept VISA, VISA Electron, or VPAY debit cards (separate HACR for VISA, VISA Electron and V PAY cards). |
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(c)

In addition, Visa Europe commits to continue to implement and to further improve the transparency measures that were introduced by the Visa Europe Board in March 2009. In particular, the commitments provide for the unblending of merchant service charges, the registration and publication of all MIF rates, the full visibility and the electronic identification of commercial cards, the unbundling of acquirers, and the possibility for merchants to freely choose to accept VISA, VISA Electron, or VPAY debit cards (separate HACR for VISA, VISA Electron and V PAY cards).

| (d) | Visa Europe shall appoint a Monitoring Trustee to monitor Visa Europe’s compliance with the commitments. Before appointment, the Commission shall have the power to approve or reject the proposed Trustee. |
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(d)

Visa Europe shall appoint a Monitoring Trustee to monitor Visa Europe’s compliance with the commitments. Before appointment, the Commission shall have the power to approve or reject the proposed Trustee.

| (9) | The weighted average immediate debit card MIF cap provided for in the commitments was assessed under the MIT. The decision finds that the commitments are appropriate and necessary to address the concerns identified in the Statement of Objections without being disproportionate. |
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(9)

The weighted average immediate debit card MIF cap provided for in the commitments was assessed under the MIT. The decision finds that the commitments are appropriate and necessary to address the concerns identified in the Statement of Objections without being disproportionate.

| (10) | The Advisory Committee on Restrictive Practices and Dominant Positions issued a favourable opinion on the adoption of the decision on 26 November 2010. On the same date, the Hearing Officer issued his final report. |
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(10)

The Advisory Committee on Restrictive Practices and Dominant Positions issued a favourable opinion on the adoption of the decision on 26 November 2010. On the same date, the Hearing Officer issued his final report.

| (11) | The decision brought the proceedings to an end insofar as Visa Europe's MIFs for consumer immediate debit payment card transactions are concerned. The decision, however, does not cover Visa Europe's MIFs for consumer credit and deferred debit card transactions, which the Commission will continue to investigate. The decision is also without prejudice to the right of the Commission to initiate or continue proceedings against other Visa network rules, such as the HACR, Visa Europe's MIFs for commercial card transactions, or the Inter-Regional MIFs. |
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(11)

The decision brought the proceedings to an end insofar as Visa Europe's MIFs for consumer immediate debit payment card transactions are concerned. The decision, however, does not cover Visa Europe's MIFs for consumer credit and deferred debit card transactions, which the Commission will continue to investigate. The decision is also without prejudice to the right of the Commission to initiate or continue proceedings against other Visa network rules, such as the HACR, Visa Europe's MIFs for commercial card transactions, or the Inter-Regional MIFs.

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(1)  OJ L 1, 4.1.2003, p. 1.

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(2)  Currently, domestic MIF rates are set by Visa Europe in nine countries. In the remaining EEA countries, domestic MIF rates are set by Visa Europe's members.

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