Visa’s top executives and directors are facing a shareholder derivative lawsuit in California federal court, accusing them of misleading investors about the regulatory risks associated with the company’s anticompetitive practices. The lawsuit, filed Friday by shareholder Manh Ho, claims Visa understated the likelihood of antitrust investigations, which became the focus of a U.S. Department of Justice (DOJ) lawsuit last year.
DOJ Lawsuit Uncovers Alleged Antitrust Misconduct
According to the DOJ’s September complaint, Visa strategically partners with emerging financial players before they can grow into serious market competitors. The DOJ alleges this practice cements Visa’s dominance while restricting competitors’ ability to introduce disruptive payment technologies.
The shareholder suit specifically highlights Visa’s contract with JPMorgan Chase, which allegedly required that 90% of Visa-branded debit cards issued by the bank be limited to just one unaffiliated PIN network. This restriction, according to the lawsuit, prevents smaller networks from gaining market share and reinforces Visa’s monopoly power.
