The U.S. Department of Justice (DOJ) announced on September 24 that it had filed a civil antitrust lawsuit against Visa Inc.. This lawsuit accuses the payments giant of monopolization and exclusionary practices in debit network markets. According to the DOJ’s press release, Visa’s dominant position in the market has stifled competition and innovation, resulting in significant costs for consumers and merchants. Filed in the U.S. District Court for the Southern District of New York, the complaint claims Visa’s actions violate Sections 1 and 2 of the Sherman Act.
The complaint highlights Visa’s control over more than 60% of debit transactions in the U.S., generating over $7 billion annually in processing fees. Visa allegedly uses its size and power to establish exclusionary agreements with merchants and banks, penalizing those who choose to route transactions through competing debit networks. These agreements, the lawsuit claims, effectively lock in debit volume to Visa’s system, limiting the opportunities for smaller and lower-priced competitors to gain market share.
The DOJ also mentions that its ability to coopt potential competitors further reinforces Visa’s dominance. The lawsuit outlines how Visa incentivizes would-be rivals to become partners instead of competing directly, often offering monetary incentives while also threatening higher fees. The Department of Justice contends that Visa feared losing market share to emerging fintech firms or other networks, leading it to engage in anti-competitive behavior.
Attorney General Merrick B. Garland emphasized the negative impact of Visa’s practices on consumers, stating that inflated fees are passed on to them through higher prices or reduced services. Principal Deputy Assistant Attorney General Doha Mekki added that Visa’s conduct hurts American consumers and stifles competition in a key market. The Justice Department is seeking to restore competition in the debit payments market through this lawsuit.
Visa’s extensive reach within the U.S. financial system makes it a formidable player, processing $12.3 trillion globally and maintaining strong profit margins.
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