Morgan Stanley Joins Visa

Morgan Stanley, MS, a US investment bank, and Visa Europe have decided to settle a long?running anti-trust dispute. The move could bring to an end a six-year competition probe by the European Commission into the credit card group.

The dispute started after Visa denied Morgan Stanley join its card network. The US investment bank had wished to offer card services to shops and merchants in the European Union. However, Visa did not permit Morgan Stanley access to its network, pointing that Morgan Stanley runs the Discover card in the US in competition with Visa.

In 2000, Morgan Stanley filed a complaint to the European Commission. The commission opened an investigation and issued formal charges against Visa in August 2004 accusing it of abusing a dominant market position. Visa has been waiting for a final decision ever since.

According to executives from both the groups, Visa and Morgan Stanley have now agreed to settle the dispute. Now, Morgan Stanley will become a member of the Visa card network, and in return withdraw its anti-trust complaint to the Commission. The move follows the decision by Visa Europe in October to split from the Visa group’s international operations. While Visa International plans to be a publicly-listed company, Visa Europe decided to retain its structure as an association owned and run by its member banks.

The Commission refused to comment on the move. Formally speaking, the settlement between Visa and Morgan Stanley does not affect the probe, although in practice it will be very difficult for the regulator to pursue an infringement already addressed by the parties. Should the agreement between the parties force the Commission to abandon its probe, it would remove the threat to Visa Europe of a fine of up to 10 per cent of its global annual turnover. However, Visa and its rival MasterCard still face pressure from the Commission to cut the fees they demand from retailers.