Visa fined £7m over Morgan Stanley dispute

The European Commission told Visa Europe yesterday to pay a ¿10.2m (£7.1m) fine after ruling the credit card network operator had broken the law by preventing US bank Morgan Stanley from joining its network.

The fine follows a six-year dispute between the two companies, during which time the US bank was barred from joining Visa's European network. The row meant Morgan Stanley was unable to offer its European customers Visa-branded cards.

Visa argued that Morgan Stanley could not join because it owned the Discover credit card network in the US and therefore operated in direct competition.

The Commission said this refusal was "unfair and discriminatory". It pointed out that Discover did not operate in Europe and that Visa had already admitted Citigroup, even though the bank operated the Diners Club network, which Visa might equally have considered a competitor.

While the two companies last year settled a legal action over the dispute, the Commission said it believed the fine was justified because Visa had continued to block Morgan Stanley for two years after 2004, when regulators first objected to its position.

Neelie Kroes, the EU's Competition Commissioner, said the dispute was particularly damaging for British retailers because Visa accounted for about 60 per cent of all credit card transactions in the UK. She said: "Visa's action reduced choice for UK retailers, which were denied potential access to alternative suppliers of credit card acceptance services."

Peter Ayliffe, Visa Europe's chief executive, said it would appeal against the fine. He said Visa had not acted illegally.