The US Department of Justice (DOJ) has filed a significant antitrust lawsuit against Visa, accusing the financial giant of monopolising the debit network markets and using its dominance to impose unfair fees on banks and merchants, as well as curbing competition. This legal action is the result of a multiyear investigation into Visa’s business practices, initiated in 2020, and follows a similar move in 2020 when the DOJ blocked the company’s attempted $5.3 billion acquisition of fintech company Plaid.
The investigation centres around Visa’s alleged “web of exclusionary agreements” with banks and businesses. These agreements, according to the lawsuit, have helped the company tighten its grip on the market, hindering the ability of competitors such as PayPal, Square, and smaller fintech companies to compete. The DOJ alleges that Visa’s executives were especially concerned about emerging threats from companies like Apple, which they reportedly saw as an “existential threat” to their business.
The department adds that Visa’s dominance in the debit market has allowed it to charge fees that far exceed what would be possible in a competitive market. Attorney general Merrick Garland emphasised the broad impact of the company’s practices, noting that the costs incurred by banks and merchants are inevitably passed onto consumers, affecting the prices of various goods and services. With over 60% of debit transactions in the US processed by Visa, the company’s influence in the market is substantial.
Visa’s general counsel Julie Rottenberg, via an email reply to Engadget, dismissed the allegations, stating that the lawsuit is “meritless” and that the company will vigorously defend its business in court. She highlighted the financial giant’s secure and reliable network, fraud protection, and the economic opportunities it provides as reasons for its market dominance.
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