Competition Tribunal Grants Interim Relief To Depansum: Visa May Not Prohibit Nedbank From Processing Transactions For Depansum

In the interim relief application between:

On 14 December 2023, the Competition Tribunal (“Tribunal”) heard an interim relief application brought by Depansum Pty (Ltd) (“Depansum”) against Visa Inc. (“Visa”) and Visa Sub-Saharan Africa Pty (Ltd) (“Visa SA”).

Nedbank Limited (“Nedbank”) was cited as an interested party in the interim relief application and no relief was sought by Depansum against Nedbank.

Depansum provides e-commerce payment processing solutions in South Africa for merchants based offshore. It alleges that Visa and Visa SA established rules that are treated as a binding contract between Visa and its members (including banks), and that Visa uses these rules to prohibit banks (in this case, Nedbank) from using Depansum’s payment system. Depansum alleges that this conduct constitutes an abuse of dominance and contravenes the Competition Act, 89 of 1998, as amended.

Visa disputed the allegations and opposed Depansum’s interim relief application. Among others, it alleged that Depansum’s local collecting agent (“LCA”) activities (for foreign merchants) in South Africa contravene the country’s exchange control laws. Visa argued that it was not prepared to permit its payment network to be associated with unlawful conduct. In addition, Visa argued that Depansum failed to demonstrate that Visa’s enforcement of its rules was anti-competitive or that it had any anti-competitive effects.

The Competition Commission is investigating Depansum’s complaint of an alleged abuse of dominance by Visa.

The Tribunal has decided to grant Depansum interim relief and issued its order today, which includes the following:

For a period of six months from the date of the Tribunal’s order, or the conclusion of a hearing into the complaint filed by Depansum under case number IR080Aug23, whichever is the earlier:

The First, Second and Fifth Respondents (“Visa”) are interdicted and restrained from enforcing clause 1.5.1 of the Visa Rules against Nedbank in respect of transactions processed by Nedbank as the acquiring bank for Depansum;

Visa is further interdicted and restrained from:

1. prohibiting Nedbank from processing transactions for Depansum as its acquiring bank; and/or
2. seeking to induce Nedbank not to process transactions for Depansum as its acquiring bank on the basis that
   1. the merchant that is ultimately to receive the payment made pursuant to the transaction is not located in South Africa;
   2. the “merchant location” for the merchant is incorrectly assigned and/or;
   3. the processing of the transaction constitutes cross-border acquiring.

For the avoidance of doubt, the interdicts in the above paragraphs include within their scope, prohibitions on Visa levying fines, threatening termination of Visa’s provision of its card network services to Nedbank, or terminating Visa’s provision of its card network services to Nedbank.

Issued by:

Gillian de Gouveia, Communications Manager

On behalf of the Competition Tribunal of South Africa

Cell: 27 (0) 82 410 1195

E-Mail: GillianD@comptrib.co.za

Twitter: @comptrib