[WaytooHigh.com, editorial comment: We were delighted with the opening remarks by Visa USA's CEO and president. This was a watershed moment. Mr. Coghlan reflected that due to his background as a former merchant, he is interested in "exploring new and more creative ways of working cooperatively with merchant partners." This speaks volumes about his commitment to his customers. As fellow entrepreneurs and retailers, we find these heartfelt comments to be reaffirming and. looking forward, an important new beginning].
Excerpts from the Visa USA Annual Report 2005
1) "Net income increased 72 percent, to more than $360 million, heralding a rapid return to a positive equity position soon after the Retailers settlement."
2) "With respect to existing litigation, I want to comment specifically about interchange lawsuits brought against Visa and other payment systems by merchants. As a former merchant, I understand the tremendous economic pressures merchants face. I believe that there are better ways than lawsuits to lower costs. While we remain confident in our ability to defend interchange from merchant and other attacks, I won’t let anything stand in the way of our exploring new and more creative ways of working cooperatively with merchant partners to help them achieve their goals and better serve their customers. If we can find solutions that work for all of us, we will have an opportunity afforded few others." - John Philip Coghlan, Chief Executive Officer and President
3) "Multidistrict Litigation Proceedings. During 2005, merchants who accept Visa-branded payment cards have filed a number of additional cases against Visa U.S.A. Inc. and other defendants, asserting violations of the federal antitrust laws, and seeking treble damages for alleged overcharges in merchant discount fees, along with other relief. Currently, nearly fifty additional cases, most of which are asserted is purported class actions, are pending against Visa U.S.A. Inc. On October 19, 2005, the Judicial Panel on Multidistrict Litigation (“JPML”) issued an order establishing a Multidistrict Litigation (“MDL”) in the Eastern District of New York before the Honorable John H. Gleeson, to coordinate pretrial proceedings in these cases. Fourteen of the cases have already been ordered transferred to the Eastern District of New York; the JPML has been notified of the remaining potential “tag-along” actions, and those cases have been or likely will be included on a Conditional Transfer Order in the near future. Plaintiffs in four of the potential “tag-along” actions have indicated that they intend to oppose inclusion of those cases in the MDL. The majority of these cases include claims that interchange violates Section 1 of the Sherman Act. A number of the cases, either instead of or in addition to claims based on interchange, assert that Visa’s “no surcharge” and other rules violate Section 1 of the Sherman Act. Some of the cases also allege that Visa ties “Premium Credit Cards” to other Visa credit cards, and that Visa ties “Payment Guarantee Services” to other network services. Several cases claim that Visa has monopolized the “debit and credit services market” in violation of Section 2 of the Sherman Act. Additional allegations in some of these cases include the claim that Visa’s “no-surcharge” rule constitutes a conspiracy to monopolize trade in violation of Section 2 of the Sherman Act, and that Visa engages in exclusive dealing. One case claims that interchange constitutes unjust enrichment and violates the consumer protection statutes of 22 states and another alleges monopolization claims under Arizona unfair competition law. Finally, a few cases allege that the purported tying of “commercial products” to a merchant’s acceptance of other Visa services violates Section 1 of the Sherman Act, that the same conduct constitutes attempted monopolization and conspiracy to monopolize in violation of Section 2 of the Sherman Act, and that merchant discounts are supracompetitive as a result of the alleged tying arrangements. Proceedings in all of these cases are at an early stage."
[source: Visa USA Annual Report]
