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4/24/2013
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DataCell Wins WikiLeaks Donation Case

Iceland's Supreme Court upholds ruling against Valitor, a local processor of Visa and MasterCard payments that declined to credit donated funds to DataCell client Wikileaks.

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DataCell, a data-hosting service provider based in Reykjavik, Iceland, has emerged victorious in its legal battle against Valitor, a local processor of Visa and MasterCard payments that declined to credit donated funds to DataCell client WikiLeaks.

Following WikiLeaks' publication of U.S. diplomatic cables in 2010, financial and payment companies such as MasterCard and Visa began refusing to process funds donated to WikiLeaks on the basis of alleged unlawful conduct. WikiLeaks and founder Julian Assange have not been charged with any crime. Valitor's decision to support this financial blockade has now been declared unlawful.

Iceland's Supreme Court upheld a prior ruling that Valitor had violated the law by terminating its contract with DataCell. Until Valitor re-opens its payment processing gateway, the company is subject to a fine of 800,000 ISK ($7,300) per day.

[ Is mobile payment tech as promising as it seems? EBay, PayPal Fuel Future Of Mobile Commerce. ]

Reached by phone, DataCell CEO Andreas Fink said he had just learned of the decision from his legal counsel. "We will see what happens now," he said. "I have no clue if they will open up and allow payments, or if they just keep it closed and pay fines every month."

Visa did not respond to a request for comment.

"This is a victory for free speech," said WikiLeaks publisher Julian Assange in a statement. "This is a victory against the rise of economic censorship to crack down against journalists and publishers. We thank the Icelandic people for showing that they will not be bullied by powerful Washington-backed financial services companies like Visa. And we send out a warning to the other companies involved in this blockade: You're next."

DataCell is pursuing a similar claim against a MasterCard and Visa licensee in Denmark. It is also awaiting action on a complaint filed with the European Commission in July 2011.

DataCell's complaint alleges that MasterCard's and Visa's conduct violates antitrust rules. "Together VISA and MasterCard have over 96% of the payment card market in Europe and when these organizations deny businesses which rely on selling their services online, access to their networks they contravene the antitrust rules of the European Union, both as regards the ban on restrictive business practices and the one that prohibits the abuse of market dominance," the company said in 2011.

Fink expressed frustration with the European Commission's apparent disinterest in his company's claim. Normally, the Commission decides whether to pursue claims within a few months, he said. But almost two years later, the Commission has yet to declare its intent.

"They're postponing it, I think, because it's political dynamite for them," he said. "They're trying to sit it out."

The ability of financial companies to decide whether they will transfer funds to controversial organizations might eventually be regulated, at least in Europe. In November 2012, the European Parliament adopted a resolution "to define objective rules describing the circumstances and procedures under which card payment schemes may unilaterally refuse [payment]."

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