

WikiLeaks wins case against Visa - Kenan
https://rt.com/news/wikileaks-visa-court-case-040/

======
asdfasdghasdf
This is a pretty poor article, unsurprising coming from an arm of the Russian
government that employs Julian Assange. Here's a summary without any politics
or conspiracy theories.

So, each payment that Visa or Mastercard process comes with a risk. If that
payment was made with a stolen card, Visa and Mastercard are on the hook for
it. Because of that, for example, the fee the merchant pays per transaction
can be wildly different depending on its nature.

In-person transaction with a signed receipt at a coffee shop: pretty safe.
Internet payment: riskier. Require a CCV from the customer, a bit safer.
Customer is from a foreign bank? Risky again. Online pharmacy: even riskier.
Check this out:
[http://www.mastercard.com/us/merchant/pdf/MasterCard_Interch...](http://www.mastercard.com/us/merchant/pdf/MasterCard_Interchange_Rates_and_Criteria.pdf)

Merchants also are subject to credit checks... they do a lot to make sure they
won't be on the hook for a bunch of chargebacks.

Some categories of purchase are considered too risky to even consider. From
Visa/Mastercard's perspective, if you're going to be receiving a ton of
donations from paranoid hackers who took down your own website and probably
think they're being tracked and monitored by the US government (which they
very well may be), it's probably safe to guess there may be some stolen card
numbers in there and are not going agree to let payments to Wikileaks go
through their system.

So, Wikileaks and their data host came up with a brilliant idea: their host,
DataCell, will sign up to receive payments with their credentials, and then
it'll give the money they raised to Wikileaks. They entered into a contract
with Valitor (which isn't a subsidiary of Visa or anything: it's just one of
three card processors in Iceland, who handles acquiring services for Visa and
Mastercard) saying that they will be collecting payments for their data
hosting services.

They write a donation page and get everything set up, test it out, and then
after a couple weeks turn it on. About a week after that (or possibly the same
day, according to one source
[http://www.bloomberg.com/news/2012-07-12/iceland-court-
order...](http://www.bloomberg.com/news/2012-07-12/iceland-court-orders-
valitor-to-process-wikileaks-donations-1-.html)), Visa and Mastercard call
Valitor up... kinda like how they call you up if you make an unexpected $1000
purchase in another country out of the blue. They say, "hey, you guys are sure
selling a lot of servers, or whatever. What's going on there?"

Valitor has to come clean and say that people are paying Datacell with the
expectation of that money going to Wikileaks. Visa and Mastercard say, "oh,
that's pretty clearly not what we signed up for here: this is, like, millions
of high-risk payments. You're gonna have to cancel that account." And they do.

So now Datacell sues them for breach of contract. The contract pretty clearly
states that Datacell is not allowed to use their account to process payments
for other parties. This is Valitor's only defense. Datacell's argument is
super weak. They say they are not processing payments for other parties, but
that their core business includes allowing their customers to collect
payments. The payments intended for Wikileaks are part of the principal
business and they're collecting that money to offset the cost of paying
Wikileaks.

The judge pretty much ignores that argument but finds in favor of Datacell
anyway. Valitor had full knowledge going into the contract that DataCell was
going to be processing payments for Wikileaks. Its employees provided help in
designing and creating the Wikileaks website, and they tested the website for
them. Because Valitor knew this was going to be used for Wikileaks
fundraising, they cannot now argue that that isn't allowed by contract.

So, Valitor will appeal this decision, but if it holds up, they'll probably
just wind up going out of business (unless they decide $6000/day is
affordable). Visa and Mastercard are just gonna turn them down as customers
because this was some fraudy shit they pulled. They'll go out of business, and
Icelandic merchants will just have to sign up with one of their two
competitors instead.

~~~
dangrossman
There is no situation in which Visa is left on the hook for accepting a
fraudulent payment. AFAIK, they have zero liability. Customers have no direct
relationship with Visa in which they can demand money for misuse of their
card, they have only a member agreement signed with the card issuing bank that
makes such anti-fraud guarantees. So the bank is on the hook.

Except not really. The bank passes on full liability to the merchant that
accepted the payment. When the chargeback occurs, the payment is taken back
from the merchant, plus a bunch extra as a chargeback fee to cover the costs
of pushing around the forms between banks and taking the report from the
cardholder over the phone. Knowing this only works when the merchant still has
the money to take back, any hint of a merchant going over 1% of their monthly
volume in chargebacks will generally trigger the bank to start holding back
some or all of their payments in a reserve fund to cover the potential
chargebacks.

The only way for the bank to be on the hook is if the merchant (like
Wikileaks) passes the risk assessment enough to start accepting cards, and has
a clean chargeback record up until the point a massive number of them come in,
AND when the bank tries to recover that money, the merchant's already drained
their bank account so there's nothing to recover.

If that happens, the bank's screwed, but Visa's still perfectly happy having
taken 1-4% of every charge, even the fraudulent ones, with no liability for
the stolen cards.

Why bother expanding on that tidbit? Because if Visa has zero liability, then
why would Visa corporate be telling anyone not to accept cards from Wikileaks?
That's not normal. The people that decide who can accept Visa cards are the
underwriting departments at individual banks that back merchant service
providers, not employees at Visa Inc.

~~~
anona
The 1-4% you mention is the interchange rate. This is collected by the issuing
bank, and not Visa. Visa typically receives a separate flat fee per
transaction. Although often payment processors will charge the merchant a flat
percentage fee which includes the interchange fees, acquiring bank fees,
association fees, and the payment processors fees.

Visa Europe (a separate company from Visa USA) would likely have to assume
liability for chargebacks in the event that the acquiring bank went out of
business without transferring it's Visa business to another bank. I'm not sure
if such a situation has ever happened though. In general the liability goes:
Merchant -> Payment Processor -> Acquiring Bank -> Visa.

------
beggi
The headline is a little misleading. DataCell, Wikileaks hosting provider,
actually won a case against the local company Valitor, VISA's issuer and
processor in Iceland. Also in case you're wondering as I was, Wikileaks was
not awarded compensatory damages but Valitor must reopen their payment gateway
within 2 weeks (although they can still appeal to a higher court).

~~~
tokenadult
The source of the submitted article, rt.com, is not known for careful
journalism. I'll check what other sources say about the full implications of
the case.

After edit: Now I've had time to check some other news sources.

[http://www.washingtonpost.com/business/lawyer-wikileaks-
wins...](http://www.washingtonpost.com/business/lawyer-wikileaks-wins-
icelandic-court-victory-in-financial-fight-against-visa-
mastercard/2012/07/12/gJQAe0kPfW_story.html)

"The implications of the judgment, which Valitor plans to appeal, weren’t
immediately clear.

"Even if Valitor is eventually forced to comply with the judgment, it isn’t
clear whether Visa or MasterCard would allow their customers to make donations
to DataCell or WikiLeaks. Both companies have refused to deal with WikiLeaks
for the better part of two years, leading to allegations that they had bowed
to U.S. pressure to starve the organization of funds."

[http://www.wired.com/threatlevel/2012/07/wikileaks-visa-
bloc...](http://www.wired.com/threatlevel/2012/07/wikileaks-visa-blockade/)

"The Associated Press reports that Valitor can appeal the decision, but even
if it chooses to comply with the judgment, it’s not clear that Visa or
MasterCard will still allow customers to make donations to DataCell or
WikiLeaks."

~~~
maratd
> The source of the submitted article, rt.com, is not known for careful
> journalism.

Understatement of the year.

~~~
alexqgb
Remember, that's "R" as in "Russia", which really isn't a region renowned for
reliable reporting.

~~~
ZeroMinx
As opposed to the United States of Murdoch (?!)

~~~
tptacek
Yes. Because Fox News exists, US journalism is totally no more reputable than
Russian journalism.

~~~
fffggg
My father once said "The difference between American and Russian propaganda is
that Russians know that Pravda is propaganda."

The problem with American media is certainly not limited to Fox.

~~~
tptacek
That and the Russian propaganda machine might at any moment decide to have you
killed.

How convincing do you think these epigrams actually are? The reality is that
the US media market provides a vastly more credible stream of current events
information than Russia's ever has. Does that make the US media credible? It's
hard to say. Russia is a _very, very low bar_ to clear.

~~~
fffggg
The best lies incorporate as much truth as possible. I believe you're
suggesting the same thing I am -- that the US propaganda machine is much more
subtle, and therefore more credible.

A false narrative is a false narrative, regardless of how skillfully it is
intertwined with truth.

~~~
davidw
I think he's suggesting that terms like the "US propaganda machine" are, to
use a technical term, "bullshit", in the sense that there are a great deal of
competing interests and players in the news market in the US, as well as
various competing interests in politics. Talking about _a_ machine makes it
sound like you're talking about one centrally controlled system that in
reality does not exist.

That's not to say there aren't problems with the news industry in the US and
elsewhere, but it's not some giant conspiracy either.

~~~
fffggg
There's no need for a conspiracy or for central organization when incentives
align. In this case, the incentives to manipulate are often financial or
political. You have misunderstood my meaning of "machine" -- not all social
systems involve a central authority.

I hope you can agree that American media can be influenced, for profit, by
monied interests. If you agree, then you acknowledge the system I have
described above.

~~~
davidw
But there are many different monied interests! Sometimes they conflict with
one another. Sometimes they conflict with popular interests. For instance, Fox
News certainly isn't on the same page as Obama, or the Clintons, and yet they
are pretty powerful in their own ways. It hardly sounds like _a_ machine, but
a competitive environment. Certainly not a perfect one, but not nearly so
sinister as a label like "the US propaganda machine".

~~~
fffggg
Nowhere did I suggest the message was cohesive. It is very much an arena of
competing propaganda. The mention of a unified conspiratorial message was a
strawman introduced by tptacek, not I.

As for your complaint about the sinister tone, I think offering deference to
those with money rather than those with truth is quite sinister. I think it's
sad you disagree.

------
pvnick
Was this really the main obstacle for donations involving Visa? Does forcing
the Icelandic arm of Visa to accept donations mean that Americans will be able
to donate to Wikileaks? It seems farfetched that an international company as
large as Visa would actually follow these orders, seeing as they probably want
to protect themselves from leaks involving their own interests.

~~~
JoshTriplett
If a company has a branch in a given country, that country can hold the local
branch legally responsible for the actions of branches elsewhere, including
non-compliance with local rulings. Unless VISA wants to close VISA Iceland
(Valitor) completely and write off the entire country, they either have to win
their appeal or comply with the ruling.

------
batgaijin
RT also did an awesome program with Assange while he was under house arrest:

<http://assange.rt.com/>

------
SoftwareMaven
Didn't _Citizens United_ effectively say that donating money is protected
speech? Apparently we need a Wikileaks party in the US.

~~~
einhverfr
No. It said that spending money on advertising was protected speech. _Citizens
United_ actually stated that direct donations, or advertising in concert with
candidates (essentially gifts in kind) could still be criminalized.

(I actually read the opinion.)

~~~
vishaldpatel
So, basically.. you can get your guy elected by helping spread the message by
pouring money into advertising, just not buy him, or buy votes etc...?

~~~
einhverfr
And you can't coordinate your message with him. In other words he can't tell
you what to say and you can't run your message by him.

~~~
caf
This seems a bit strange - protected speech is no longer protected if you
consult someone about it before you say it?

~~~
einhverfr
It gets worse, I am afraid. Look at Holder v. Humanitarian Law Project.

It's protected speech if you blog saying "Terrorist organizations should adopt
non-violent methods of resistance instead of blowing up cafes. Here's how it
might work as an overall strategy, using Hamas as an example...."

However if you print this out and mail it to Hamas, that's not protected, and
may be offering expert assistance to a foreign terrorist organization....

Apparently the First Amendment no longer protects the question of who you talk
to.

~~~
einhverfr
It's kinda funny this was downvoted since both Citizens united and HLP both
drew this funny line at "who you talk to or with." It's a line I don't
understand the justification for and it seems dangerous to me, but it is what
we are stuck with.

------
linuxhansl
How can Visa or MasterCard censor what I can do with my money, especially when
it comes to an entity that has to this day not even been charged with a crime?

It speaks to our "obedient sheep" nature that there has been no outcry about
this.

Some will say: "Well Visa and MasterCard are private companies", which is
technically true of course, but when they handle the majority of all private
money transaction there are other factors at play.

------
nhangen
Don't credit card providers' terms of service give them the right to block
payments to those that use the service in violation?

~~~
trevelyan
In violation of what? Journalism is not illegal.

~~~
nhangen
I'm not arguing for or against Wikileaks as illegal, I'm just wondering if,
from a purely legal standpoint, Visa has a right to refuse service to a
business based on their terms of service?

------
gruuuuuuuu
It's funny to read a comment here a couple days ago
(<http://news.ycombinator.com/item?id=4237027>), bemoaning the quality of the
reddit frontpage, for this 'story' just appearing there.

Two days later, it's the second highest story on the Hacker News frontpage.

------
maeon3
Visa, helping shady soveriegn's levy secret and illegal financial warfare
against political international opponents since forever. Priceless.

