The Department of Justice (DOJ) has filed an antitrust lawsuit against Visa, accusing the financial giant of maintaining a monopoly over debit network markets, as reported by Bloomberg.
The lawsuit claims Visa’s control allows it to charge high fees to banks and merchants, which are then passed on to consumers, while preventing companies like PayPal and Square from competing on equal footing. The DOJ’s lawsuit follows a multiyear investigation into Visa’s business practices that began in 2020.
The DOJ previously blocked Visa’s $5.3 billion bid to acquire fintech startup Plaid, arguing that the acquisition would have eliminated a competitive threat to Visa’s dominance in the debit market. Visa dropped the acquisition in 2021 to avoid further legal disputes, though the DOJ continued to investigate its business operations.
In the latest lawsuit, the DOJ alleges that Visa has used a “web of exclusionary agreements” to solidify its market dominance and suppress competition. Attorney General Merrick Garland stated that Visa’s conduct has allowed the company to impose fees far higher than what would be feasible in a competitive market. According to Garland, these fees affect not only the price of specific goods but contribute to higher prices overall, as merchants and banks pass the costs onto consumers.
Visa’s General Counsel, Julie Rottenberg, dismissed the lawsuit as “meritless” in a statement to Engadget, emphasizing that Visa operates in a growing debit market with numerous competitors. Rottenberg defended Visa’s role, highlighting the company’s secure and reliable network, advanced fraud protection, and the economic opportunities it provides.
