Final report of the Hearing Officer in Case COMP/37.860 — Morgan Stanley Dean Witter/Visa International

(Pursuant to Articles 15 and 16 of Commission Decision 2001/462/EC, ECSC of 23 May 2001 on the terms of reference of Hearing Officers in certain competition proceedings — OJ L 162, 19.6.2001, p. 21)

2009/C 183/04

The draft Decision in the above-mentioned case gives rise to the following observations.

Complaint

The present case arises out of a complaint submitted jointly by Morgan Stanley (formerly known as Morgan Stanley Dean Witter & Co.) and Morgan Stanley Dean Witter Bank Limited (now Morgan Stanley Bank International Limited) (hereinafter jointly referred as ‘Morgan Stanley’) to the European Commission on 12 April 2000. The complaint concerned in particular the application (to Morgan Stanley) of a provision of the By-Laws of Visa International Service Association whereby Visa membership was refused to ‘any applicant which is deemed by the Board of Directors to be a competitor of the corporation’ (the ‘Rule’). On the basis of the Rule, Visa membership was refused to Morgan Stanley in March 2000, thereby excluding Morgan Stanley as a merchant acquirer for Visa transactions not only in the UK but in all EEA Member States where the Rule had application.

Statement of Objections and first Letter of Facts

A Statement of Objections (‘SO’) was sent to Visa International Service Organisation and Visa Europe (hereinafter jointly referred to as ‘Visa’) on 2 August 2004. Visa Europe, responsible for the EU Region, had been incorporated on 1 July 2004 and it applied the same Rule (1).

Following extensions of the deadline granted upon request, Visa responded to the SO on 3 December 2004.

Visa was given access to the file on 1 and 2 September 2004. Upon Visa's request additional access to documents was provided on 19 November and 17 December 2004. By letter of 23 December 2004 the Commission services informed Visa (first Letter of Facts) of certain additional information included in the file subsequent to the access to file and explained how the Commission might use such information in a final decision. Visa provided further comments on 12, 14 and 17 January 2005.

One particular aspect of access to the file remained at issue throughout the procedure as far as Visa was concerned, namely, access to Morgan Stanley's Strategic Plan referred to by the latter to evidence its intention to establish an integrated issuing and acquiring business within the UK and other EU Member States ready to be launched in May 2005 if it were granted membership of Visa. In Visa's view this document was a fundamental piece of evidence which should have been made accessible in full for the purpose of its rights of defence. Visa was initially provided with a short summary of the Strategic Plan. Upon request to me, I agreed that a non-confidential version of the report should be provided to Visa. Subsequently, Morgan Stanley provided a more extensive non-confidential version of this Plan to be submitted to Visa for the purpose of these proceedings, having regard in the meantime to the passage of time and as a goodwill gesture in an attempt to bring the dispute on this issue to a close. Morgan Stanley also responded to questions which Visa had raised with the Commission services in relation to the Plan. Nevertheless, Visa has continued to maintain that its rights of defence have not been respected in this regard. I have responded to Visa a number of times in the course of the proceedings on this issue. My final conclusion is that, having regard to the balance of interests to be made between the need to safeguard Visa's rights of defence on the one hand, and the legitimate interests of Morgan Stanley in the protection of its business secrets on the other hand, and with particular reference to the criteria of assessment set out in the Commission Notice on the rules for access to the Commission file (2), that Visa's rights of defence have been adequately and appropriately protected in the draft Decision to be adopted in this case.

Pursuant to Article 6(1) of Commission Regulation (EC) No 773/2004, Morgan Stanley, as formal complainant, was provided with a non-confidential version of the SO on which it submitted written observations. These observations were forwarded to Visa which, in turn, submitted further comments. In the interests of transparency Morgan Stanley was also provided with a non-confidential version of Visa's reply to the SO, which led to additional comments from Morgan Stanley and then again, in turn, from Visa.

Visa waived its right to an oral hearing in this case.

Second Letter of Facts and subsequent events

On 6 July 2006, the relevant Commission service sent a further letter of facts (‘Letter of Facts’) to Visa setting out additional factual evidence in support of the conclusions in the SO, together with an updated access to the file. Upon request, an extension of the deadline to respond to the Letter of Facts was granted until 22 September 2006. In response to arguments raised by Visa I rejected the contention that the Letter of Facts raised new allegations or a different case going beyond the scope of the SO. I also rejected the contention that Visa had insufficient time to respond properly to the Letter of Facts. Queries raised by Visa in their response of 22 September 2006 were subsequently dealt with in full by the relevant Commission services in their letter of 5 December 2006.

In the meantime, on 22 September 2006, Morgan Stanley became a member of Visa Europe and withdrew its complaint with the Commission. On 2 October 2006 the Commission services sent requests for information to both Visa and Morgan Stanley in order to obtain a copy of the settlement agreement of 21 September 2006 between Morgan Stanley and Visa pursuant to which Morgan Stanley was admitted as a member of Visa Europe. Visa replied on 9 October 2006.

Further to a request for information sent by the Commission to Visa on 20 October 2006 concerning its turnover, Visa provided a further submission on its case to the Commission on 27 November 2006.

As in its letter of 27 November 2006 Visa stated that it had changed the Rule, the Commission sent a request for information to Visa on 5 December 2006 in order to obtain further clarification on this issue. Visa replied on 12 December 2006.

An additional access to file and further final opportunity to comment was provided to Visa on 12 January 2007. Comments were submitted on 15 February 2007 (3).

The draft Decision

In the draft Decision, the Commission established the starting date of the infringement to be 22 March 2000 (4), when Visa had first informed Morgan Stanley that it was not eligible for Visa membership, and the termination date to be 22 September 2006, when Morgan Stanley was admitted as a Visa member. For the purpose of the fine to be imposed in this case, only the period between the notification of the SO (2 August 2004) and 22 September 2006 is taken into account.

The draft Decision submitted to the Commission only contains objections in respect of which the parties have been afforded the opportunity of making known their views.

I conclude that the rights of the parties to be heard have been respected in the present case.

(1)  Prior to 1 July 2004, ‘Visa EU’ was a geographical division of Visa International.

(2)  Commission Notice of 13 December 2005 on the rules for access to the Commission file in cases pursuant to Articles 81 and 82 of the EC Treaty, Articles 54 and 57 of the EEA Agreement and Council Regulation (EC) No 139/2004, paragraph 24.

(3)  As in its comments of 15 February 2007 Visa mentioned to the Commission that Morgan Stanley had submitted an application form, the Commission sent a request for information to Visa on 3 April 2007 asking for the date of such application form and requesting a copy thereof.

(4)  A later date as compared to the starting date referred to in the SO.