The US Department of Justice has filed an antitrust lawsuit against payment giant Visa, accusing the company of monopolizing the market for debit card payments and deliberately eliminating potential competitors. The lawsuit was filed in a federal court in Manhattan on Tuesday and describes a "network of exclusion agreements" that Visa has made with merchants and banks to protect its dominant position in the debit market.
We claim that Visa has unlawfully amassed the power to impose fees far exceeding what it could charge in a competitive market," said US Attorney General Merrick Garland.
Visa, which processes more than 60 percent of debit card transactions in the U.S., earns over $7 billion in processing fees annually, according to the lawsuit. These fees, the complaint states, are passed on to consumers—either through higher prices or reduced quality or service.
The lawsuit further claims that Visa has consolidated this power not through competition, but by eliminating rivals. Instead of responding to the growing competition from other debit networks and technologies such as Apple Pay, Visa has "fought the competition," said a representative of the Justice Department.
Visa hinders rival networks through agreements with merchants and banks that offer significant discounts when a certain transaction volume is processed via the Visa network. These "volume thresholds" have led to merchants almost always choosing Visa, even when other networks offer better conditions.
Visa has not yet responded to a request for comment. The company's shares fell by 4 percent on Tuesday after reports of the impending lawsuit became known.
The lawsuit is not the first legal blow against Visa. In 2020, the Department of Justice prevented Visa's acquisition of the tech company Plaid, valued at $5.3 billion. Mastercard has also been under antitrust scrutiny in the past and settled with the U.S. Federal Trade Commission last year over allegations of illegal business practices.
The case against Visa is set within the context of intensified antitrust enforcement under the Biden administration, which particularly targets dominant companies. Jonathan Kanter, head of the Justice Department's Antitrust Division, specializes in combating the market dominance of large corporations and is also leading lawsuits against Google.
