The Biden administration is readying its next big antitrust fight — and it’s against Visa777club, one of the pillars of the global payments system.
The Justice Department is expected to sue the company as soon as Tuesday, accusing it of illegal monopolistic practices and other unlawful behavior, DealBook’s Lauren Hirsch and The Times’s David McCabe report. It’s the latest effort by federal officials to crack down on corporate middlemen on competition grounds.
At the center of the lawsuit is payment processing technology, which connects a bank to a merchant whenever a purchase is made. The Justice Department plans to argue that Visa punishes customers, including merchants, when they try to use competing services to process payments.
Prosecutors are also expected to say that Visa coerces financial technology firms to work with it by threatening penalties on those who do not, and thus squeezing out potential new competitors. The Wall Street Journal previously reported that the Justice Department was examining incentives that Visa had given to Square, Stripe and PayPal.
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SKIP ADVERTISEMENTThe Justice Department has investigated Visa for years, which the company previously disclosed. Federal authorities conducted hundreds of interviews with parties, including retailers, grocery stores and banks, to understand Visa’s agreements with financial technology firms. Investigators looked at the negotiations, contracts and ways in which the penalties were structured.
The origins of the case date to 2020 when the Justice Department sued to block Visa’s $5.3 billion deal for the financial technology firm Plaid, arguing that the deal aimed to stamp out a young competitor. The Justice Department said Visa dominated the debit market for “years” and “protected its monopoly with exclusionary tactics.” (The companies later abandoned the transaction.)
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