I think I knew that, but forgot. I have no real direct experience with this other than once signing up to be a merchant, but my girlfriend once worked for a processing company. Visa still has incentive to prevent fraud, though, right? Even if just for its own reputation? Banks probably won't issue Visa cards if they can't trust they won't be used fradulantly? If Visa has zero liability, then why would Visa corporate be investing in fraud protection at all?
Anyway, I didn't mean to speculate on motivations. I just wanted to explain that this is just some small Icelandic card processing company that got sued by a small data hosting company after they both conspired to funnel Wikileaks payments through as payments for data services and Visa and Mastercard objected.
It's far from the WIKILEAKS DEFATS VISA headline, especially since neither were party to the lawsuit.
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...
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...), 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.
"Their bills have had mixed success and usually die before being brought to a vote, but SOPA and PIPA came frighteningly close to becoming law. The internet-wide protest this week seems to have stalled their progress and probably killed them for now."
Frighteningly close! One of them was almost scheduled for debate in the Senate! The other almost had a second round of markup in committee scheduled!
The reaction to SOPA and PIPA was way overblown. Like the article says, this sort of thing happens all the time, and usually fizzles out. While this bill did have more co-sponsors than most, indicating support, it still only made it to the first verse of Schoolhouse Rock.
Somehow it caught on as an Internet meme, though, and got inordinate attention. It was definitely for the best, though.
If you can produce evidence that a corporation has donated to even one candidate, much less 50, the FEC would love to speak to you; it's illegal for corporations to donate to candidates.
While this has been true for the past year, the linked page gets its data from OpenSecrets which tracks only hard money donations to campaigns. It's tracking almost entirely donations from people who work in the given industries, so I think it's misleading to bring up corporate personhood here.
When they say "Time Warner gave $50,0000 to Senator So-and-So," that actually means "People who work for Time Warner gave a total of $50,000 to Senator So-and-So's campaign in donations of no more than $5000 each." It's illegal for a company to donate to a candidate. I think many Americans don't understand that either.
Also, surveys have shown that all those donors are giving because they already agree with the senators' views, not because they think they can influence them.
As they mention on their Banking Blockade site, the Treasury found no reason to put them on their blacklist, and nobody has frozen their bank accounts.
I agree they're a 'journalistic entity' -- whatever that means. I was only rebuffing when you said "We have just established a precedent that the US government can unilaterally decide to shutdown any journalistic entity that reports news it doesn't like."
Their webpage is still up. Assange is still making cheesy videos where he tells you how terrible the world is. It's still legal for you to donate. Nobody has accused them of committing any crime. A handful of US companies decided not to do business with them, but with only circumstantial evidence of government influence. There were certainly no judges involved.
Wikileaks shut themselves down to new submissions a year and a half ago when they started pushing Brad Manning leaks, and they've done nothing but hype up and politicize those leaks since. Now they're whining that nobody's donating to a whistleblower site that doesn't accept whistleblowing. They shut themselves down.
In no way did the US government unilaterally decide to shut anyone down. They're still allowed to operate, and just drama-queening that they're shut down. If the government were to try to shut down a news organization just because it didn't agree with them, there definitely would be a gigantic backlash.
You're obviously exaggerating what I said for effect, but that's the gist of it, yeah.
I didn't mention his sex crime accusations, and I only said that there's no actual evidence that the US government directly influenced Visa and Mastercard. Surely it's possible Visa, MasterCard, etc. made their decisions on their own, but I honestly don't know, and wouldn't be surprised if it was a "favor."
But for the rest, the numbers speak for themselves, and it's pretty much common sense. Everytime there's major leak, they got a ton of money. They've haven't been publishing, they're not getting attention, nobody's donating to them. From their own charts, they made more in post-blockade February '11 than they did in pre-blockade Sep '10. Again, most of their 2010 money... more than 50% of all their money came through channels that are still totally available.
It is true that they were taking in more with PayPal than through transfers before December. There's obviously no way to know how much of potential paypal donations were lost versus replaced by wire donations, but it remains that most of their money in 2010 came from transfers. In December, about 2/3s of it came from transfers. The steep drop-off from December to January in their charts has nothing to do with the blockade, right? They got 398,365.60EUR through wire transfer in December and (estimating from their charts) about 20K in January. Is that not clearly just interest from the embassy cables dying down?
They're claiming they've lost out on "tens of millions of pounds" because of this 'blockade.' That is a ridiculous number, considering they made just more than 1M last year. Somehow they expected to average more than twice that every month? Despite not publishing any new sources of material? Or even accepting any new material? Ridiculous.
This is an organization that accepted credit card payments for 46 DAYS and they're coming on like Visa and Mastercard are ruining them?
Everything Wikileaks has done since Assange started talking with Brad Manning has been hyped-up, conspiracy-theory, drama-queen publicity stunt and this 'financial blockade' is no exception.
I don't think we have established such a precedent. Wikileaks is still up. You can still donate to them. Visa and Mastercard have decided not to allow them as a customer, but I know of no evidence that says it was ordered by the US government (that's not to say it wasn't).
Wikileaks's claim that this 'blockade' has shut them down is just based on the fact that they haven't been receiving a lot of donations since the embassy cable leak (http://www.wikileaks.org/Banking-Blockade.html). Of course, they haven't done anything interesting since then, either. Look at their own charts, and you see that their income is heavily correlated with major releases (etc. Collateral Murder in April, Embassy cables in December) and their current donations don't look that far removed from, say, September or May 2010.
Even their own financial statements (http://wauland.de/files/2010_Transparenzbericht-Projekt04_de...) say that most of their money came wire transfer (which is still possible and fully legal). This is definitely more an issue of people not wanting to donate than it is being not able to. Obviously, the best way to raise more funds would be to do more high-profile work; WikiLeaks is choosing to shut down all their high profile work.
You say the government shut them down, but in fact they shut themselves down, as your parent comment mentions. They shut down their super-useful, award-winning site (eventually to be put back up as a read-only archive at http://www.wikileaks.org/wiki/WikiLeaks) and re-purposed themselves entirely to hyping up the five things they got from Brad Manning. Now, they're out of money, they're out of juicy Brad Manning leaks, they haven't even been accepting anything new since they shut themselves down, and so they're gonna drum up their little government-conspiracy thing that they do very, very well, to try to raise some more money.
Because Visa and Mastercard are private companies that can decide whom they want or don't want as customers. They'll deny you from being a merchant if you have poor credit, too. They take on risk with every new merchant they accept, and I can see how WikiLeaks might pose a greater risk than most. If a group's supporters are willing to DoS visa.com and mastercard.com, I wouldn't put it past them to make large donations with stolen credit card numbers either, and Visa and Mastercard are on the hook for the chargebacks.
And, of course, since money is speech, it's fully within your rights to donate to wikileaks (cash, check, wire transfer, money order), just as its within Visa's rights not to accept Wikileaks as a customer.
EDIT: And just to be clear, I'm not trying to argue that there are no political motivations behind the decisions of Visa and Mastercard. I'm just answering the question about why this isn't for some reason illegal.
Anyway, I didn't mean to speculate on motivations. I just wanted to explain that this is just some small Icelandic card processing company that got sued by a small data hosting company after they both conspired to funnel Wikileaks payments through as payments for data services and Visa and Mastercard objected.
It's far from the WIKILEAKS DEFATS VISA headline, especially since neither were party to the lawsuit.