Visa faces US Justice Department antitrust case for illegally monopolizing debit card market

Visa shares fell 1.95% Monday after the close of trading in New York following the news | Photo: Bloomberg

2 minutes of reading Last update: Sep 24, 2024 | 7:50 AM IST

Authors: Leah Nylen and Kartikay Mehrotra

The U.S. Department of Justice plans to charge Visa Inc. with illegally holding a monopoly on the U.S. debit card market, according to people familiar with the matter.

The antitrust division is expected to file a lawsuit as early as Tuesday accusing the operator of the largest U.S. payment network of a range of anticompetitive conduct, said the people, who asked not to be identified discussing the matter. The government is expected to file the case in federal court.

Law enforcement is preparing to accuse Visa of taking steps to prevent rivals from challenging its dominance in the debit-card market, the people said. The government’s accusations include that Visa entered into exclusivity agreements to stymie the expansion of rival networks and thwarted efforts by technology companies to enter the market.

Visa shares fell 1.95 percent in post-market trading on the New York Stock Exchange on Monday after the news was announced.

Visa and the Justice Department declined to comment.

The Justice Department’s lawsuit would be the culmination of a multi-year investigation into Visa’s business practices, which stemmed from the company’s failed acquisition of financial infrastructure company Plaid Inc. in 2021.

During the investigation, the Justice Department also examined Visa’s pricing structure for a technology known in the industry as “tokenization.”

Payment network rival Mastercard Inc. last year filed a separate enforcement action against its company over practices related to its tokenization technology, brought by the U.S. Federal Trade Commission, which also enforces antitrust laws.

First published: Sep 24, 2024 | 7:50 AM IST