MasterCard, Visa face EU complaint over WikiLeaks donations

WikiLeaks' card payment processor is preparing legal action against Visa Europe, MasterCard Europe and other payment intermediaries after its contract to process payments was abruptly terminated following WikiLeaks' release of secret U.S. diplomatic cables last November.

DataCell wants Visa Europe and MasterCard Europe to allow it to resume processing payments, including donations to the whistle-blowing website, according to its lawyer Sveinn Andri Sveinsson.

Sveinsson is preparing two civil lawsuits, and readying a complaint to the European Commission about MasterCard Europe and Visa Europe, he said Monday.

The complaint will be filed with the Commission on Thursday if MasterCard and Visa do not relent, Sveinsson said. It alleges that the companies violated Articles 101 and 102 of European competition rules, which could result in a fine from the European Commission, he said.

DataCell, an Icelandic data center operator and web hosting provider, provided a payment gateway for organizations such as WikiLeaks that did not have merchant accounts for receiving card payments. DataCell received a fee from WikiLeaks for processing donations.

Donations and other transactions through DataCell's payment gateway were processed by Korta, the Icelandic agent for Teller, a payment services provider based in Denmark. DataCell's complaint alleges that Visa and MasterCard ordered Teller to stop processing donations to WikiLeaks. DataCell had a contract with Teller to process payments, but Teller terminated the contract on Dec. 7.

Visa holds a 67.6 percent share of the European market for payment cards, with MasterCard taking 27.7 percent, which the complaint says constitutes a "collective market dominance." The anticompetitive effects of their refusal to process WikiLeaks donations amounts to discrimination between customers and distorts competition, which places DataCell at a competitive disadvantage, the complaint says.

DataCell has tried to find other companies to partner with in order to process MasterCard and Visa transactions, but to no avail. Telus told DataCell that MasterCard and Visa have prohibited other companies from working with it, DataCell's complaint says. As a result, DataCell's business has been seriously damaged since it relies on the payment card processing system for its customers to purchase its services.

A Visa spokeswoman said the company had received a letter about the action but had no further comment. MasterCard did not have a comment. Sveinsson said he had not heard yet from either company.

Sveinsson said WikiLeaks is also preparing two civil lawsuits, one to be filed in Iceland and the other in Denmark. The civil suit in Iceland will seek compensation from the card companies, he said. The suit in Denmark will allege breach of contract between DataCell and Teller.

If the situation between MasterCard and Visa does not change, those suits will likely be filed later this year, as courts in Iceland and Denmark are not in session due to the summer holidays, Sveinsson said.

Send news tips and comments to jeremy_kirk@idg.com