The US Justice Department has filed a lawsuit against Visa, accusing the payments giant of unlawfully monopolizing the debit network markets.
The civil antitrust lawsuit claims that Visa maintains its dominance by obstructing competition and limiting the development of new alternatives. Currently, Visa processes over 60% of debit transactions in the United States, generating more than $7 billion in annual fees.
According to the complaint, Visa’s actions include using its significant market presence to impose exclusionary agreements on merchants and banks. These agreements penalize customers who attempt to route transactions through different debit networks or alternative payment systems. Additionally, the lawsuit alleges that Visa stifles smaller competitors or pressures them into partnerships.
In 2020, the Justice Department intervened to halt Visa’s $5.3 billion acquisition of fintech company Plaid, arguing that the merger would eliminate a potential competitive threat.
Attorney General Merrick Garland stated, “We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market. Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service. As a result, Visa’s unlawful conduct affects not just the price of one thing – but the price of nearly everything.”
In response, Visa has asserted that it will vigorously defend itself in court. The company’s general counsel, Julie Rottenberg, remarked, “Anyone who has bought something online, or checked out at a store, knows there is an ever-expanding universe of companies offering new ways to pay for goods and services. Today’s lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving.”