The Justice Department filed an antitrust lawsuit against Visa on Tuesdayroyal888, accusing the financial giant of unfairly stifling competition in debit cards, the latest in a string of cases aimed at deterring monopolistic behavior by big companies.
For more than a decade, the government claims in its complaint, Visa has entered into de facto exclusive agreements with merchants and banks, encouraging them to route the bulk of their transactions through Visa’s payment network. The company has maintained a monopoly in large part by imposing or threatening to impose higher fees on merchants that also use other payment networks to process debit transactions, according to the Justice Department.
The lawsuit stems from a sweeping investigation dating back years. It is part of a series of efforts made by enforcers under the Biden administration to target corporate middlemen, which it says needlessly increase fees, and take aim at power wielded by companies spanning technology to agriculture. President Biden in 2021 rolled out an executive order that made aggressive antitrust enforcement a pillar of his economic policy.
Visa is a very big middleman: It processed $3.8 trillion in U.S. debit transactions in the year through June, generating over $7 billion in processing fees per year, the Justice Department said. Those account for more than 60 percent of all such transactions.
Advertisement
SKIP ADVERTISEMENT“Visa’s unlawful conduct affects not just the price of one thing, but the price of nearly everything,” Attorney General Merrick B. Garland said in a statement accompanying the complaint, which was filed in the Southern District of New York.
Visa’s fees, which are largely invisible to the public, are paid by merchants and can be passed on to consumers, hitting younger and lower-income Americans the hardestroyal888, Benjamin Mizer, the Justice Department’s third-ranking official, said at a press conference on Tuesday.