First Data Sues Visa for Anti-Competitive Conduct
Wednesday November 6, 8:03 am ET
DENVER, Nov. 6 /PRNewswire-FirstCall/ -- First Data Corp. (NYSE: FDC - News), a global leader in electronic commerce and payment services, on November 5, 2002, filed a counter suit against Visa alleging anti-competitive and monopolistic practices that limit competition, innovation and choice in the payments industry. Visa filed suit against First Data in April, attempting to block the expansion of processing credit card transactions through First Data Net, and in August added a ban on all private arrangements -- an arrangement to provide efficient direct connections to authorize or to clear and settle transactions outside of VisaNet.
"For many years, Visa's rules allowed for private arrangements. But, when First Data began testing the first such meaningful arrangement, Visa abruptly changed the rule to prohibit all such innovations," said Eula L. Adams, senior executive vice president of First Data. "Visa has a track record of changing the rules when a rule no longer is in their best interest. In fact, Visa's Chairman, Carl Pascarella, has publicly stated his view: if a rule is hurting us, change the rule."
First Data Net enables direct connections between merchant acquirers and card issuing banks, eliminating unnecessary detours in the payment process. Currently, Visa requires payments to go through its own network -- even if a payment can be processed securely and more directly between a merchant and a card-issuing bank. First Data Net is simply an expansion of the low-cost, secure processing services First Data has delivered to the marketplace for more than 30 years.
"The suit that Visa filed against First Data in April 2002, and Visa's subsequent decision to completely ban all private arrangements, are efforts to stifle a competitive challenge - not to protect the payment system as Visa alleges," added Adams. "First Data's effort to defend against this suit is an effort to allow competition in the marketplace that leads to innovation and broader choices for everyone. We feel strongly that in order to challenge the status quo and move the industry forward, we cannot accept Visa's anti-competitive and monopolistic actions. . ."
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