The Antitrust Division of the Department of Justice (DoJ) brought an antitrust lawsuit against Visa due to Visa's exclusionary and anticompetitive behaviour leading to monopolisation in the debit network markets in violation of Sections 1 and 2 of the Sherman Act.
According to the DoJ's assessment, Visa has a significant market share among banks and consumers in the debit network markets and has deepened this position through various anti-competitive behaviours. Visa was found to have engaged in the following behaviours in order to eliminate competition and prevent competitors from obtaining the necessary data to compete:
- Leverage System: Visa implements a large number of transaction-based leverage agreements in order for merchants, banks and financial institutions to fulfil their large volume commitments. The main feature of these agreements is that it allows for disloyalty penalties to be imposed if the volume of debt does not exceed the commitments made to Visa. Because of this agreement, merchants have the opportunity to trade through different undertakings that offer more favourable prices on existing transactions, but they cannot benefit from this opportunity due to this practice of Visa.
- Killer Acquisitions: It has been understood that Visa aims to stop the development of technology companies and fintech startups with network targets by becoming a partner of them instead of innovating in this field if they offer better or cheaper payment products.
It is concluded that Visa used its significant market share to impose its exclusionary agreements on customers and banks, thereby locking customers' debit volumes and excluding competitors from competition. The petition also alleged that Visa provided monetary incentives and threatened punitive surcharges to its competitors in order to establish its market share.
(DoJ – 24.09.2024)
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