The U.S. Department of Justice (DOJ) on Tuesday filed an antitrust lawsuit against credit card giant Visa in the Southern District of New York, accusing the company of abusing its market power to stifle competition in the debit card sector and inflate costs for consumers and businesses.
The lawsuit alleges that Visa uses its vast network to unfairly penalize merchants and banks that choose cheaper alternative payment processors. press releaseApproximately 60% of U.S. debit transactions occur on Visa's debit network, processing more than $7 billion in fees annually.
“We allege that Visa has illegally amassed the power to collect fees far in excess of what it could charge in a competitive market,” Attorney General Merrick B. Garland said in a statement. “Retailers and banks then pass these costs on to consumers, either by raising prices or reducing quality and service. As a result, Visa's unlawful conduct affects not just the price of one thing, but the price of nearly everything.”
BATH, UNITED KINGDOM – NOVEMBER 5: In this photo illustration, Visa, Mastercard and American Express logos are seen on credit and debit cards in Bath, United Kingdom on November 5, 2023. Visa and charities warn that millions of families in the UK are going into debt to cover basic bills and expenses, and that the UK is entering a dangerous new phase of a cost-of-living crisis. (Photo by Matt Cardy/Getty Images)
The complaint details Visa's practices of imposing volume limits and effectively blocking competitors from entering the market, including partnering with potential rivals to thwart competition, reminiscent of the company's blocked $5.3 billion acquisition of fintech startup Plaid in 2020, which the Department of Justice blocked over market monopoly concerns.
The Justice Department has launched several significant legal actions, including a lawsuit against real estate companies for plotting to gouge rents and a lawsuit against Live Nation for monopolistic practices, and successfully established that Google's search operations violate federal antitrust laws, CNN reports. Reported. (RELATED: DOJ investigating Slimeball Silver's NBA for alleged antitrust violations against famous rapper's league: Report)
“Anyone who has ever bought something online or checked out in a store knows that more and more companies are offering new ways to pay for goods and services,” Visa general counsel Julie Rottenberg said in a statement, according to CNN. “Today's lawsuit ignores the reality that Visa is just one of many competitors in the growing debit card industry, and that others who enter the industry are thriving.”
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