Department of Justice (DOJ) He filed an antitrust lawsuit against Visa. The lawsuit alleges that the financial firm has a monopoly on debit network markets, allowing banks and marketplaces to charge exorbitant fees that are passed on to consumers, preventing rival companies such as PayPal and Square from competing on their level.
first reported Monday that the DOJ plans to file an antitrust lawsuit against Visa starting in 2020 after a multiyear investigation into Visa’s business practices. Tried to get a visa. With a $5.3 billion offer, however, the DOJ filed a lawsuit blocking the deal, arguing that the buyout would remove a competitive threat that would complicate Visa’s strong control of debit markets.
Visa dropped the offer a year later to avoid any further legal ramifications, but the Justice Department continued to investigate Visa’s business practices.
In its latest lawsuit, the DOJ alleges that Visa’s “web of exclusive agreements” with banks and businesses helped bolster its market dominance and “suffocate” any potential competitors. Attorney General Merrick Garland said in a statement that Visa “unlawfully amassed the authority to charge fees far in excess of what it could reasonably charge in a competitive market.
“Merchants and banks pass these costs on to customers by either raising prices or reducing quality or service,” the statement said. “As a result, Visa’s illegal behavior affects the price of not just one thing, but the price of almost everything.”
This was stated by Julie Rottenberg, general counsel of Visa Engadget said in an emailed statement that the DOJ’s claim was “without merit” and that they plan to vigorously defend themselves in court.
“Today’s litigation ignores the reality that Visa is only one of many competitors in the growing debit space, and one of the successful entrants,” 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 deliver. We’re proud of the payments network we’ve built, the innovation we’ve driven, and the economic opportunity we enable.”
