2011-07-01 WikiLeaks and Datacell to sue Visa & MasterCard for 'US influenced financial blockade'

Wikileaks has announced specifics of their threatened legal action against Visa and Mastercard. Announcement from Wikileaks below:

LEGAL ACTION BY WIKILEAKS AND DATACELL AGAINST VISA AND MASTERCARD

Release after Sat 2 Jul 2011 00:00:00 GMT

WikiLeaks and Datacell (a service provider assisting WikiLeaks) are to sue Visa & MasterCard for engaging in an unlawful, U.S. influenced, financial blockade.

On June 9th a the law firms Bender von Haller Dragested in Denmark and Reykjavik Law Firm in Iceland acting on behalf of DataCell and WikiLeaks told the companies that if the blockade is not removed they will be litigated in Denmark and a request for prosecution will be filed with the EU Commission. Visa Europe, MasterCard Europe, and Teller (a Danish company licensed to process transactions on behalf of the card companies) are the subjects of the complaint.

It was pointed out to these companies that their coordinated action on December 7th last year to block all credit card transactions to WikiLeaks and DataCell constituted a serious violation of the Competition Rules of the EU (Article 101(1) and 102). Furthermore, that the actions of these companies have violated Danish merchant laws when they terminated the payment services and by refused to reinstate them.

Visa Europe, Master Card Europe, Teller and Korta where told that if the payment services would not be reinstated and liability for the damages accepted, DataCell and WikiLeaks would file a complaint to the European Commission regarding violation of EU competition laws and file a lawsuit with Danish Maritime and Commercial Court (“Sø- og Handelsretten ”).

Teller has acknowledged that it is ready to reinstate the services as due diligence by the company has not found any violations by DataCell, but, despite this, the company has been ordered by Visa and MasterCard to keep the payment services closed. Visa and Master Card (which have 70 and 25 percent market share in Europe respectively) have not answered the demands or shown willingness to negotiate a settlement.

In light of this outcome DataCell and WikiLeaks will instruct their international legal team to take actions against these companies in the coming days as outlined above. Further actions in other jurisdictions will follow.

For information concerning the complaint to the EU Commission and the case in general please contact:

Sveinn Andri Sveinsson, Supreme Court Attorney, sveinnandri@icelaw.is, phone +354 8947406 any hours.

------

Supplementary information:

The actions of Visa Europe and MasterCard Europe as concerns DataCell and Wikileaks violate the EU Treaty

In December 2010 the international card companies, Visa Europe and MasterCard Europe ordered the Danish/Norwegian payment card service company, TELLER A/S, to terminate its payment services (provided through its agent Korta in Iceland) to DataCell ltd., (datacell.com). Wikileaks, the media organisation, had received donations through the web-site of Datacell.

DataCell tried to get access to the international payment card networks through other members of the Visa and MasterCard networks without success. Their order to exclude DataCell from payment services has not only blocked donations to Wikileaks but has also effectively prevented DataCell from operating and receiving payments for its services as an international data centre and hosting operator.

In Europe, as in most parts of the world, Visa and MasterCard dominate the market for collecting and processing (acquiring) payments made with payment cards. Visa holds about 70% of this market in Europe, while MasterCard has around 26% of the market. Collectively, these franchises hold therefore approximately 96% of the market for acquiring services in Europe.

DataCell claims that the order of the card companies to its members (licensees) in Europe to boycott Datacell, absent any objective justification, (no such has been provided by the card companies) constitutes an abuse of market dominance in the meaning of Article 102 of the Treaty on the Functioning of the European Union, (TFEU).

DataCell furthermore claims that identical and simultaneous actions taken by Visa, MasterCard , Teller and Korta in respect of DataCell (and Wikileaks) constitute a concerted anti-competitive practice in the meaning of Article 101 (1) of the TFEU which prohibits all agreements and concerted practices, which prevent, restrict or distort competition within the internal market.

The penalty for infringing the competition rules of the EU can amount to 10% of the turnover of the companies involved. Moreover, violators of the competition rules may now be sued in most jurisdictions within the EU for damages under the law on tort. DataCell (and Wilkleaks) are now preparing such action in Demark and Iceland against the card companies.

As mentioned above it is the opinion of DataCell that the card Companies have not been able to provide any objective justification for their actions. In this context it is emphasised:

(I) The provision of payment gateways whereby the holder of a merchant agreement uses its merchant account to accept, idonations/payments related to non-profit organisations or companies, which do not have their own merchant account is common and accepted business practice.

(II) The services provided by DataCell to Wikileaks are in no way different from other payment card gateways provided by competitors of DataCell to organisations and companies around Europe and around the world.

(III) When DataCell entered into the payment service agreement with Teller and Korta it was made clear to the companies that DataCell would use its merchant account to receive donations for Wikileaks.

(IV) When Teller at the request of DataCell carried out a compliance check of DataCell’s operations they were found to be 100% compliant with Teller’s requirements and the terms and conditions of the payment services agreement.

(V) Wikileaks has nowhere been found to be engaged in any illegal activity. Infact, in the only formal US review to occur, the U.S. Secretary of the Treasury, Timothy C. Geitner, refused (January 13) to add WikiLeaks to the US financial embargo list, saying that there was no legal justification to do so.

(VI) There are no ownership connections between DataCell and Wikileaks / Sunshine Press Foundation (the Sunshine Press Foundation is the corporate arm of the Wikileaks organisation). Datacell does not have any representatives or representation in the Wikileaks organisation nor does Wikileaks have any say in the matters DataCell. The relationship between DataCell and Wikileaks is a pure business relationship.

(VII) Finally, Visa and MasterCard do not prevent their members from supplying payment card services to media organisations that openly support and cooperate with Wikileaks.

-Julian Assange