The US Department of Justice has filed an antitrust lawsuit against payment services provider Visa over Visa’s alleged monopoly on the debit card network.
The Ministry of Justice says Visa has engaged in anticompetitive practices by stifling competition and innovation in violation of Sections 1 and 2 of the Sherman Act.
According to the company, Visa controls three out of every five U.S. debit transactions, resulting in $7 billion in processing fees annually.
Visa accused of monopolistic practices
The U.S. government is filing a lawsuit alleging that Visa has maintained its dominant position in the payments market by entering into exclusionary agreements that punish merchants and banks for using its competitors.
According to U.S. officials, consumers have been hit with inflated fees while smaller payment processors and fintech companies have been unable to grow. The Justice Department has also found Visa guilty of partnering with potential competitors by offering generous financial incentives to “insulate” itself from the competition.
Attorney General Merrick B. Garland confirmed: “We allege that Visa unlawfully acquired the power to collect fees far in excess of what it could charge in a competitive market.”
Deputy Assistant Attorney General Benjamin C. Mizer added: “Today’s action against Visa reminds those who seek to stifle competition rather than compete on price or invest in innovation that the Department of Justice will never hesitate to enforce the law on behalf of the American people.”
This isn’t the first time Visa has come under fire in the U.S. In 2020, the DOJ sought to prevent the company from acquiring fintech app technology company Plaid. The proposed $5.3 billion deal was indeed called off.
Ny Breaking has asked Visa to respond to the Justice Department’s announcement, but the company did not immediately respond.