Visa is under increasing legal scrutiny as a new antitrust lawsuit filed by US merchants joins a wave of legal challenges facing the payment card giant.
The latest lawsuit, filed by All Wrapped Up Signs and Graphix, an advertising and marketing company based in Florida, comes on the heels of a major antitrust case brought against Visa by the U.S. Justice Department just last week.
A wave of private litigation often follows major government cases involving large companies, exposing them to potentially higher damages.
The class-action lawsuit, filed in federal court in Manhattan, echoes the claims made by the Biden administration in its case against Visa.
Both the Justice Department and the merchants accuse Visa of using its dominant position in the debit card market to stifle competition.
The lawsuit alleges that Visa paid potential competitors to avoid developing rival networks and imposed higher fees on merchants who attempted to process transactions using alternative platforms.
The lawsuit highlights Visa’s immense power in the payments industry, claiming that the company unfairly profits while merchants suffer under the weight of excessive fees.
According to the complaint, Visa charges over $7 billion annually to merchants in debit card processing fees, which they say is a significant financial burden for businesses of all sizes.
Dan McCuaig, an attorney for All Wrapped Up at the law firm Cohen Milstein Sellers & Toll, stated that they look forward to representing the class of businesses harmed by Visa’s allegedly anticompetitive practices.
The case has the potential to represent hundreds of thousands of businesses, both large and small, who may have been impacted by its dominance.
While Visa has yet to comment on the lawsuit, it has already denied the Justice Department’s claims and vowed to fight the government’s case.
However, this new lawsuit could mark the beginning of a wave of private litigation targeting Visa, exposing the company to potentially massive legal and financial liabilities.
As Visa faces increasing legal pressure from both the government and private businesses, the outcome of these cases could have far-reaching implications for the payments industry, particularly in how fees and competitive practices are regulated.
The case, All Wrapped Up Signs and Graphix v. Visa, is pending in the Southern District of New York – No. 1:24-cv-07435.
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