The U.S. Department of Justice has filed a civil antitrust lawsuit against Visa, accusing the company of monopolizing the debit card markets in violation of Sections 1 and 2 of the Sherman Act. The lawsuit, filed in the U.S. District Court for the Southern District of New York, alleges that Visa's dominance in the debit card markets has enabled it to maintain a monopoly position through exclusionary and anticompetitive behavior, thereby undermining choice and innovation in payment systems.
According to the lawsuit, Visa controls over 60% of debit transactions in the U.S. and generates over $7 billion in fees annually from processing those transactions. The Justice Department alleges that Visa illegally exploits its dominant position to stifle competition by imposing restrictive agreements on merchants and banks and penalizing them for using alternative debit networks. These practices are allegedly designed to protect Visa's market position and prevent the growth of smaller, lower-cost competitors.
“We allege that Visa has unlawfully amassed the power to charge fees that far exceed what it could charge in a competitive market,” said Attorney General Merrick B. Garland. “Merchants and banks pass these costs on to consumers, either by raising prices or by degrading quality or service. As a result, Visa's unlawful conduct affects not just the price of one thing — but the price of almost everything.”
The Justice Department's complaint describes Visa's efforts to insulate itself from competition by forcing potential rivals to partner, offering financial incentives, and threatening punitive fees. The department argues that Visa's actions have resulted in billions of dollars in additional fees for American consumers and businesses while stifling innovation in the debit payments ecosystem.
Assistant Attorney General Benjamin C. Mizer emphasized the harm caused by Visa's conduct: “Anti-competitive conduct by companies like Visa harms the American people and our entire economy. Today's action against Visa reminds those who would rather stifle competition than compete on price or invest in innovation that the Department of Justice will never hesitate to enforce the law on behalf of the American people.”
Visa's position as a dominant player in the debit market on both the merchant and consumer side gives it considerable leverage. The complaint highlights that Visa's exclusion agreements impose heavy penalties on merchants and banks that do not agree to use Visa's payment channels for nearly all debit transactions. This setup forces merchants to rely heavily on Visa even when lower-cost alternatives are available.
The Justice Department also pointed to Visa's tactics toward technology companies and fintech startups. Internal Visa documents show that the company viewed these new entrants as a potential threat. Instead of competing with them, Visa sought agreements to turn these potential competitors into partners. In 2020, the Justice Department filed an antitrust lawsuit to block Visa's $5.3 billion acquisition of Plaid, a technology company that developed groundbreaking online debit payment options. That merger was ultimately canceled.