Opinion ID: 6330404
Heading Depth: 2
Heading Rank: 3

Heading: Volume-Based Agreements

Text: Finally, Pulse argues it suffers antitrust injury from Visa’s volumebased routing agreements with merchants and issuers. These agreements, Pulse alleges, are “designed to lock up the market and thereby protect Visa’s lucrative signature debit business from competition from Pulse Pay Express and other debit networks’ PINless products.” Pulse claims the agreements thus constitute “exclusive-dealing or quasi-exclusive-dealing agreements,” which Visa has employed to suppress competition and reduce Pulse’s market share in PINless transactions. See, e.g., ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 270 (3d Cir. 2012). 23 Pulse argues the district court erred in ruling it lacks antitrust standing to challenge the volume-based agreements. We agree. As it did with respect to FANF, Visa argues that the agreements merely amount to “non-predatory price competition.” See ARCO, 495 U.S. at 340–41. That’s a merits question, however. At this stage we must assume that Pulse will prove the agreements violate the antitrust laws as anticompetitive exclusive-dealing arrangements. See Doctor’s Hosp., 123 F.3d at 306. Based on that assumption, Pulse has shown antitrust injury. Similar to its claims against FANF, Pulse isn’t claiming that it’s losing a fair price war against Visa. Instead, it’s claiming that Visa has used its market dominance to strong-arm merchants into avoiding Pulse Pay Express. Visa also makes the factual argument that its agreements with merchants and issuers are “short term, freely terminable, contain[ ] no penalties for non-performance, and impose[] no obligations or commitments 23 As the Third Circuit has explained, “[a]n exclusive dealing arrangement is an agreement in which a buyer agrees to purchase certain goods or services only from a particular seller for a certain period of time.” ZF Meritor, 696 F.3d at 270. Such arrangements, while not always anti-competitive, “may be used by a monopolist to strengthen its position, which may ultimately harm competition.” Ibid. (citing, inter alia, Tampa Elec., 365 U.S. at 327–29; 11 Herbert Hovenkamp, Antitrust Law ¶ 1800a, at 3 (3d ed. 2011)). 18 Case: 18-20669 Document: 00516267971 Page: 19 Date Filed: 04/05/2022 No. 18-20669 on . . . merchants.” But the record reveals fact disputes on that point. For instance, Pulse deposed an officer from Kroger, a major merchant, who stated that Visa fined Kroger repeatedly for using competing PIN debit networks instead of Visa’s signature debit network and threatened to revoke Kroger’s ability to accept any Visa debit card. So, what to make of Visa’s agreements with merchants and issuers is a fact question for a jury, not a summary judgment issue for a court. And a reasonable jury could find that some of Visa’s volume-based agreements amount to exclusive-dealing contracts designed to squeeze Pulse out of the PINless transaction market. 24