The Justice Department’s Antitrust Division has been aggressively pursuing civil enforcement actions.  While criminal enforcement of antitrust laws has been depressed, DOJ has found success in pursuing civil and merger enforcement.  DOJ recently won a significant victory against Google for its monopolization of the search market.

DOJ has now turned its attention outside of technology markets by filing suit against Visa for its dominance of the debit card transaction market.  DOJ charged Visa with monopolization and other unlawful conduct in debit network markets in violation of Sections 1 and 2 of the Sherman Act. DOJ filed the comprehensive case in the United States District Court for the Southern District of New York.

DOJ’s complaint alleges that Visa has monopoly power over debit network markets by leveraging its dominant position to thwart competition and prevent others from developing new and innovative market alternatives.

Specifically, DOJ claimed that Visa conduct more than sixty (60) percent of debit transactions on Visa’s debit network in the United States.  Visa’s most significant competitor is Mastercard that processes only twenty-five (25) percent of the debit processing network.

Visa charges over $7 billion in fees each year for processing these debit transactions.  Besides maintaining illegal monopoly power, DOJ alleges that Visa illegally maintained its monopoly power by insulating itself from competition.

Specifically, DOJ’s complaint claims that Visa exercises its dominance in the debit market by entering into exclusionary agreements with banks and merchants. These agreements punish Visa’s customers who rely on an alternative debit network or alternative payment system.  By doing so, Visa locks down control of debit volume, protects itself against competitors, and strangles smaller, lower-priced competitors in the debit network.

In another anti-competitive strategy, Visa induces potential competitors to become partners by offering generous monetary incentives and threatening to impose 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.

Debit transactions are an important component of the U.S. financial system. Millions of Americans prefer or must use debit for online and in-person purchases. Visa dominates debit network markets that facilitate these transactions, charging significant fees and stifling competition in the process. Through this lawsuit, the Justice Department seeks to restore competition to this vital market on behalf of the American public.

Visa’s monopoly position maintains control of both sides of the debit market — with merchants and their banks and with consumers and their banks.  When facing the threat of competition from smaller debit networks or new technology entrants, Visa engaged in a deliberate strategy to suppress competition and prevent rivals from gaining the scale, share, and data necessary to compete for customers’ business.

Visa Inc. is a Delaware corporation headquartered in San Francisco. Visa has a global operating income of $18.8 billion and an operating margin of 64% in 2022. North America is among Visa’s most profitable regions with 2022 operating margins of 83%. Visa charges roughly $8 billion in network fees on U.S. debit volume annually. Globally, Visa processes $12.3 trillion in total payment volume.