Credit card blockade of WikiLeaks donations likely to be legal, EU says

Credit card companies should not be allowed to impose an 'economic death penalty,' WikiLeaks' Assange says

By Loek Essers and Jennifer Baker, IDG News Service |  Internet

"PayPal's VP said in a recent BBC interview that they based their decision on a letter they received from the U.S. authorities," Assange added.

"We have lost at least $50 million," Assange said. "We have also lost growth, which is more difficult to calculate. WikiLeaks should be 20 times bigger than it is. This blockade has forced us to reduce our publication volume."

Assange also revealed that WikiLeaks' staff has taken a pay cut of 40 percent since last year and said he personally has taken no pay. However, he would not say how many people were employed by WikiLeaks despite repeated questions from the press. "Less than 100" was all he would acknowledge.

WikiLeaks used to receive ¬120,000 a day ($150,000) in Europe, with most donations averaging less than ¬30, Assange said. While the European Commission is unlikely to decide the payment blockade against WikiLeaks violates competition laws, the European Parliament last week called for legislation to regulate credit card companies' ability to refuse service to organizations such as WikiLeaks. The Parliament voted in favor of a text that "considers it to be in the public interest to define objective rules describing the circumstances and procedures under which card payment schemes may unilaterally refuse acceptance."

The Commission will be asked to consider the text for laws limiting the rights of credit card companies to refuse service.

"The Commission's assessment to not even investigate is in total opposite direction of the political will," said Andreas Fink, CEO of DataCell, in an email. Fink read the preliminary report send to him by the Commission.

"It basically sounds like they were hunting for an excuse to not have to investigate it," he said. The Commission essentially reasoned that one less small player in the market doesn't change the market mechanics, while the intention of competition rules is to avoid powerful, monopoly-like players like Visa dictating to the market, Fink said.

"This is an economic declaration of war from Visa but because Visa is not gaining anything directly from doing so, it is not considered harmful to the market as such," he said. What Visa orders will be obeyed, Fink said, adding that when Visa ordered service providers to stop DataCell payments to WikiLeaks in Iceland, MasterCard and American Express transactions were automatically canceled as well.

"So Visa can set the rules of the market," dictating to other credit card companies, Fink said. "This is competition control at its finest," he said, calling the situation "absurd."

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