US Justice Department accuses Visa of illegal monopoly that adds to the price of ‘nearly everything'
Justice Department Sues Visa for Alleged Monopoly in Debit Card Market #
The US Justice Department has filed a lawsuit against Visa, accusing the company of illegally monopolizing the debit card market. The lawsuit alleges that for over a decade, Visa has abused its dominant position to force businesses to use its network instead of competitors’ and to prevent new alternatives from entering the market.
The Justice Department claims that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market. These costs are often passed along to consumers by merchants and banks, either through higher prices or reduced quality of service.
In response, Visa has stated that the lawsuit is meritless and that it will defend itself in court. The company argues that it faces growing competition, particularly in the online space, and that there is an expanding universe of companies offering new payment methods.
This antitrust suit is one of several major actions taken by the Justice Department recently. It follows other civil suits against a real estate company accused of artificially inflating rents and against Ticketmaster’s parent company, Live Nation.
According to the complaint, more than 60% of debit transactions in the country take place on Visa’s debit network. The company is alleged to charge over $7 billion in processing fees on these transactions. To maintain control, Visa reportedly imposes exclusivity agreements that penalize vendors and banks who want to use different systems.
The lawsuit also claims that Visa induces potential competitors to become partners instead of entering the market as competitors. This is allegedly done through monetary incentives and threats of punitive fees.
Merchants and retailers have long complained about credit card companies charging what they describe as exorbitant fees. A recent settlement between a group of merchants and Visa and Mastercard for $30 billion was rejected by a federal judge, who argued that the credit card companies needed to make more concessions to resolve the dispute.
This lawsuit represents another chapter in the ongoing debate over fees and competition in the payment processing industry, with potential implications for businesses and consumers alike.