US Justice Department files antitrust lawsuit against Visa for monopoly in debit network markets

(RTTNews) – The U.S. Department of Justice has filed a civil 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 has unlawfully maintained 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 are made through Visa’s debit card network, allowing the company to collect more than $7 billion a year in fees to process those transactions.

The complaint alleges that Visa unlawfully preserves its monopoly position by shielding itself from competition. Specifically, Visa uses its dominance, vast scale, and central role in the debit ecosystem to enforce a web of exclusionary agreements with merchants and banks. These agreements penalize Visa customers for routing transactions through alternative debit networks or payment systems. As a result, the complaint alleges, Visa effectively blocks debit volume, shields itself from competition, and stifles smaller, lower-cost competitors.

The complaint also alleges that Visa induced potential competitors to become partners rather than enter the market as competitors by offering generous financial incentives and threatening additional punitive fees. As the complaint alleges, Visa took control of the competition because it feared losing share, revenue, or being completely displaced by another debit network.

In 2020, the U.S. Department of Justice filed a civil antitrust lawsuit to stop Visa from acquiring Plaid, a fintech app company that develops groundbreaking online debit payment options. The companies abandoned their planned $5.3 billion merger.

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