Overview
On October 1, 2024, Cohen Milstein filed a putative class action on behalf of plaintiff All Wrapped Up Signs and Graphix LLC alleging that Visa Inc. violated the Sherman Act and various state antitrust laws by (1) monopolizing and attempting to monopolize, and (2) reaching agreements not to compete in and in restraint of trade of, the market for debit transactions in the United States. Plaintiff alleges that Visa’s conduct caused merchants throughout the country to pay Visa more in debit transaction fees than they would have in a competitive market.
Case Background
Visa dominates the debit network market in the United States. Debit networks connect banks so that debit transactions can be completed. More than 60% of debit transactions each year run on Visa’s debit network, and Visa charges over $7 billion in fees to process those transactions annually.
Visa has repeatedly violated the antitrust laws to maintain and enhance its debit network dominance. First, Visa prevents competitors from building a debit network at a scale that could rival Visa. Visa enters into agreements with merchants and banks requiring them to route all or nearly all of their eligible debit transactions on Visa’s debit network. Because Visa already controls over 60% of debit transactions in the United States, these agreements lock up substantial merchant debit volume and prevent smaller competitors from gaining the scale necessary to compete with Visa.
Second, Visa induces would-be competitors not to introduce or support innovations that could replace Visa’s traditional debit network. Potential Visa competitors, like fintech companies, have the scale and technological capabilities to build alternative products to debit cards. Rather than compete with these companies, however, Visa leverages its dominant debit network and enters into agreements with them that prevent the introduction of competing services. These agreements restrain competition and further entrench Visa’s hold on debit transactions in the United States.
As a result of Visa’s conduct, merchants throughout the United States pay higher fees on debit transactions than they would in a competitive market. Merchants pay network and interchange fees imposed by Visa that would be lower if Visa faced meaningful competition.