Visa hit with Justice Department antitrust lawsuit

The Department of Justice (DOJ) has filed an antitrust lawsuit against Visa. The lawsuit alleges that the financial company has a monopoly on debit network markets, which allows it to charge banks and marketplaces exorbitant fees that are passed on to consumers and prevent rival companies like PayPal and Square from competing at their level.

It was first reported Monday that the Justice Department planned to file an antitrust lawsuit against Visa following a multi-year investigation into Visa’s business practices that began in 2020. Visa had sought to complete a $5.3 billion acquisition, but the Justice Department filed a lawsuit blocking the deal, arguing that the acquisition would eliminate a competitive threat that undermined Visa’s strong grip on debit card markets.

A year later, Visa withdrew the offer to avoid further legal complications, but the Justice Department continued its investigation into Visa’s business practices.

The Justice Department alleges in its latest lawsuit that Visa’s “web of exclusionary agreements” with banks and businesses helped bolster its market dominance and “stifle” potential competitors. Attorney General Merrick Garland said in a statement that Visa “illegally amassed the authority to charge fees that far exceeded what it could have charged in a competitive marketplace.”

“Merchants and banks pass on these costs to customers by raising prices or reducing quality or service,” the statement said. “As a result, Visa’s unlawful conduct affects not just the price of one thing — but the price of almost everything.”

Visa legal counsel Julie Rottenberg said Engadget in an emailed statement saying the Justice Department’s lawsuit is “without merit” and that they plan to vigorously defend themselves in court.

“Today’s lawsuit ignores the fact that Visa is just one of many competitors in the debit space, which is growing, with new players thriving,” Rottenberg said in an email. “When businesses and consumers choose Visa, it’s because of our secure and reliable network, world-class fraud protection, and the value we provide. We’re proud of the payments network we’ve built, the innovation we’re driving, and the economic opportunities we’re enabling.”