Justice Department Sues Visa for Monopolizing Debit Card Market

The Justice Department filed a lawsuit against Visa on Tuesday, accusing the company of monopolizing the debit card market, "charging high fees and stifling competition." Archive photo by Joerg Carstensen/EPA

The Justice Department filed a lawsuit against Visa on Tuesday, accusing the company of monopolizing the debit card market while “charging significant fees and stifling competition.” File photo Joerg Carstensen/EPA

September 25 (UPI) — The US Department of Justice is suing Visa for monopolizing the debit card market while “charging significant fees and stifling competition.”

The civil antitrust lawsuit, filed Tuesday in the U.S. District Court for the Southern District of New York, accuses Visa of violating Sections 1 and 2 of the Sherman Act because more than 60% of debit transactions in the United States are processed on Visa’s debit network. Visa collects more than $7 billion in fees annually to process those transactions.

“We allege that Visa unlawfully amassed the authority to charge fees that far exceeded what it could have charged in a competitive marketplace,” said Attorney General Merrick Garland.

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

The Justice Department said it filed a lawsuit Tuesday in an effort to restore competition and improve the American people, accusing Visa of using exclusionary practices to protect its debit card business.

Visa, headquartered in San Francisco, has global operating income of $18.8 billion, according to the lawsuit, and collects about $8 billion in network fees on U.S. debit volume each year. Globally, Visa processes $12.3 trillion in total payment value.

“The anticompetitive behavior of corporations like Visa is making Americans and our economy worse off,” said Assistant Attorney General Benjamin Mizer.

“Today’s action against Visa serves as a reminder to those who would stifle competition rather than compete on price or invest in innovation that the Department of Justice will never hesitate to enforce the law on behalf of the American people,” Mizer said.

This isn’t the first time Visa has faced a U.S. government lawsuit. Four years ago, the Justice Department filed a lawsuit to block Visa’s acquisition of fintech company Plaid. The lawsuit alleged that Visa’s $5.3 billion purchase was a strategic move to prevent Plaid from encroaching on its debit card business. The companies have since backed away from the planned merger.

“Anyone who has purchased something online or made a payment in a store knows that there is an ever-expanding universe of companies offering new ways to pay for goods and services,” Julie Rottenberg, Visa’s general counsel, said in a statement.

“We are proud of the payments network we have built, the innovation we are driving, and the economic opportunities we are enabling.”