U.S. Justice Department Files Antitrust Lawsuit Against Visa For Monopoly In Debit Network Markets

(RTTNews) - The U.S. Department of Justice has filed a civil antitrust lawsuit against Visa Inc. (V) in the U.S. District Court for the Southern District of New York, alleging monopolization and other unlawful conduct in the debit network markets. The lawsuit claims that Visa unlawfully sustains its monopoly by stifling the growth of existing competitors and hindering the emergence of new, innovative alternatives.

According to the complaint, more than 60% of debit transactions in the United States run on Visa's debit network, allowing it to charge over $7 billion in fees each year for processing those transactions.

The complaint alleges that Visa unlawfully preserves its monopoly power by shielding itself from competition. Specifically, Visa leverages its dominance, vast scale, and central role in the debit ecosystem to enforce a network of exclusionary agreements with merchants and banks. These agreements penalize Visa's customers for routing transactions through alternative debit networks or payment systems. As a result, the complaint claims, Visa effectively locks in debit volume, protects itself from competition, and stifles smaller, lower-priced competitors.

The complaint also alleges that Visa also induces would-be competitors to become partners instead of entering the market as competitors by offering generous monetary incentives and threatening punitive additional fees. As the complaint alleges, Visa coopted the competition because it feared losing share, revenues, or being displaced by another debit network altogether.

In 2020, the U.S. Justice Department filed a civil antitrust lawsuit to stop Visa from acquiring Plaid, a technology company that powers fintech apps developing disruptive options for online debit payments. The companies abandoned their planned $5.3 billion merger.