US Justice Department sues Visa, saying it monopolizes debit card markets

NEW YORK — 

The U.S. Justice Department filed an antitrust suit against Visa connected Tuesday, alleging that the fiscal services behemoth uses its size and dominance to stifle contention successful the debit paper market, costing consumers and businesses billions of dollars.

The ailment says Visa penalizes merchants and banks who don't usage Visa's ain outgo processing exertion to process debit transactions, adjacent though alternatives exist. Visa earns an incremental interest from each transaction processed connected its network.

According to the DOJ's complaint, 60% of debit transactions successful the United States tally connected Visa's debit network, allowing it to complaint implicit $7 cardinal successful fees each twelvemonth for processing those transactions.

"We allege that Visa has unlawfully amassed the powerfulness to extract fees that acold transcend what it could complaint successful a competitory market," said Attorney General Merrick Garland successful a statement. "Merchants and banks walk on those costs to consumers, either by raising prices oregon reducing prime oregon service. As a result, Visa's unlawful behaviour affects not conscionable the terms of 1 happening — but the terms of astir everything."

The Biden medication has aggressively gone aft U.S. companies that it says enactment similar middlemen, specified arsenic Ticketmaster genitor Live Nation and the existent property bundle institution RealPage, accusing them of burdening Americans with nonsensical fees and anticompetitive behavior. The medication has besides brought charges of monopolistic behaviour against exertion giants specified arsenic Apple and Google.

According to the DOJ complaint, filed successful the U.S. District Court for the Southern District of New York, Visa leverages the immense fig of transactions connected its web to enforce measurement commitments connected merchants and their banks, arsenic good arsenic connected fiscal institutions that contented debit cards. That makes it hard for merchants to usage alternatives, specified arsenic lower-cost oregon smaller outgo processors, alternatively of Visa's outgo processing technology, without incurring what DOJ described arsenic "disloyalty penalties" from Visa.

The DOJ said Visa besides stifled contention by paying to participate into concern agreements with imaginable competitors.

In 2020, the DOJ sued to artifact the company's $5.3 cardinal acquisition of fiscal exertion startup Plaid, calling it a monopolistic takeover of a imaginable rival to Visa's ubiquitous payments network. That acquisition was aboriginal called off.

Visa antecedently disclosed the Justice Department was investigating the institution successful 2021, saying successful a regulatory filing it was cooperating with a DOJ probe into its debit practices.

Since the pandemic, much consumers globally person been buying online for goods and services, which has translated into much gross for Visa successful the signifier of fees. Even traditionally cash-heavy businesses specified arsenic bars, barbers and java shops person started accepting recognition oregon debit cards arsenic a signifier of payment, often via smartphones.

Visa processed $3.325 trillion successful transactions connected its web during the 4th ended June 30, up 7.4% from a twelvemonth earlier. U.S. payments grew by 5.1%, which is faster than U.S. economical growth.

Visa, based successful San Francisco, did not instantly person a comment.