DOJ Sues Visa, Alleges It Monopolizes Debit Card Markets

The U.S. Department of Justice has filed an antitrust lawsuit against Visa, alleging that the financial services giant leverages its size and market dominance to stifle competition in the debit card market, costing consumers and businesses billions of dollars, Mae Anderson reported for the Associated Press (AP).

San Francisco-based Visa is being accused of penalizing merchants and banks that don’t use Visa’s own payment processing technology for debit transactions, even though alternatives exist. I Photo: John Lambert Pearson Flickr

The complaint accuses San Francisco-based Visa of penalizing merchants and banks that don’t use Visa’s own payment processing technology for debit transactions, even though alternatives exist.

Visa collects an incremental fee for every transaction processed on its network. According to the DOJ’s complaint, 60% of debit transactions in the U.S. are conducted on Visa’s network, generating over $7 billion annually in fees.

“We allege that Visa has unlawfully amassed the power to extract fees far beyond what it could charge in a competitive market,” said Attorney General Merrick B. Garland.

“Merchants and banks pass these costs to consumers by raising prices or reducing quality or service. Visa’s unlawful conduct affects not just the price of one thing but the price of nearly everything.”

Julie Rottenberg, Visa’s general counsel, responded that the lawsuit fails to acknowledge the “ever-expanding universe of companies offering new ways to pay for goods and services,” Allana Durkin Richer also reported for AP.