Visa class action alleges company monopolizes debit card networks

Visa class action lawsuit overview:

• Who: Yabla Inc. filed a class action lawsuit against Visa Inc.
• Why: Visa allegedly monopolizes debit card networks and charges artificially inflated prices for its debit products.
• Where: The Visa lawsuit was filed in New York federal court.

A new Visa class action lawsuit claims the company monopolizes debit card networks and charges merchants artificially inflated prices for its debit products.

“Visa has engaged in a systemic, multi-pronged campaign of exclusionary conduct–deployed at each pressure point where its dominance might be threatened–that has continued to this day,” plaintiff Yabla Inc. alleges.

Yabla points to a variety of methods Visa allegedly uses to stifle competition, including preventing competitors from building innovative products and threatening businesses with punishment if they try to use cheaper and superior methods of processing debit transactions.

Visa reportedly prevents competition from PIN network operators by forcing merchants, acquirers and issuers into contracts that punish them with fees if they process more than a de minimis amount of debit transactions using lower-cost alternatives, the lawsuit says.

Visa has also induced financial technology companies to enter lucrative “partnerships” in exchange for a commitment to cooperate instead of compete with Visa, Yabla claims.

Visa debit card monopoly leads merchants to pay inflated fees, plaintiff says

As a result of this allegedly anticompetitive conduct, Yabla says it has been forced to pay artificially inflated debit network transaction fees.

At the same time, Visa has been able to “protect its massively profitable debit business” by controlling the debit card networks, and has reportedly generated more than $7 billion in fees annually.

Yabla claims these profits would decrease significantly were Visa to face meaningful competition in the debit card industry, which is why Visa has “worked to protect the profitability of its debit business at all costs.”

Yabla seeks to represent a class defined as: “All persons, businesses and other entities in the United States that have accepted general-purpose Visa-branded debit cards from no later than Oct. 22, 2020 to the present.”

The Visa class action lawsuit alleges Sherman Act violations including monopolization, attempted monopolization, unlawful agreements not to compete and unlawful agreements in restraint of trade.

The U.S. Department of Justice recently filed a Visa lawsuit alleging the company engaged in an anticompetitive scheme to establish a monopoly on debit card networks.

What do you think about the Visa debit card monopoly allegations? Join the discussion in the comments.

Yabla is represented by Matthew Tripolitsiotis, Christopher J. Cormier, Spencer Cox, Matt Strauser, Ian Baize and Warren T. Burns of Burns Charest LLP.

The Visa debit card class action lawsuit is Yabla Inc. v. Visa Inc., Case No. 1:24-cv-08045, in the U.S. District Court for the Southern District of New York.

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