Judge Rules Visa Must Face New Debit Card Antitrust Case

Visa reportedly must continue to face a class action lawsuit filed by merchants alleging that the company has a monopoly in the debit card market.

A judge rejected Visa’s argument that some of the merchant plaintiffs should be removed from the case because they released their claims in a 2019 settlement, Bloomberg reported Wednesday (Aug. 20).

The judge ruled that the settlement does not apply to the new case because the facts are “materially different,” in part because the earlier lawsuit named both Visa and Mastercard, while the newer one filed in October includes only Visa, according to the report.

Visa did not immediately reply to PYMNTS’ request for comment.

The suit filed in October accuses Visa of anticompetitive behavior related to its debit card network, PYMNTS reported at the time.

“Visa dominates the debit network market, and it has engaged in unlawful conduct that has artificially raised the price of those fees beyond what they would be in a more competitive market,” the proposed class action suit said. “Visa has monopolized the debit network on which debit card transactions run. It has entered into agreements to punish businesses that seek to use alternative networks or methods to process debit transactions.”

A week earlier, on Sept. 24, the Department of Justice filed an antitrust lawsuit against Visa, accusing the company of stifling competition in the debit card market.

From Karen Webster: Missing Pieces: What the Pundits Get Wrong About the DOJ Debit Interchange Lawsuit Against Visa

The DOJ’s complaint alleged that Visa employed exclusionary contracts and anticompetitive practices to maintain its market share dominance, resulting in higher fees for merchants and consumers.

In a statement provided to PYMNTS at the time, Visa General Counsel Julie Rottenberg said the DOJ’s lawsuit is “meritless.”

“Anyone who has bought something online, or checked out at a store, knows there is an ever-expanding universe of companies offering new ways to pay for goods and services,” Rottenberg said. “Today’s lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving.”

In June, a federal judge rejected Visa’s bid to dismiss the DOJ lawsuit, saying the company’s arguments were “premature” and that the government can proceed with its claim.

Bloomberg’s report published Wednesday noted that with the merchants’ class action lawsuit allowed to proceed, Visa likely faces years of litigation in the two separate antitrust cases.

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