The Department of Justice (DOJ) has initiated an antitrust lawsuit against Visa, alleging that the financial firm monopolizes the debit network markets. The DOJ claims that Visa’s dominant position allows it to impose exorbitant fees on banks and merchants, which are subsequently passed on to consumers, and prevents competitors such as PayPal and Square from competing effectively.
Bloomberg initially reported on Monday that the DOJ was preparing to file this lawsuit following a multiyear investigation into Visa’s business practices that began in 2020. During this period, Visa attempted to acquire the fintech startup Plaid for $5.3 billion. However, the DOJ intervened, arguing that the acquisition would eliminate a competitive threat to Visa’s control over the debit markets, leading Visa to abandon the bid a year later to avoid further legal complications.
The DOJ’s current lawsuit contends that Visa’s “web of exclusionary agreements” with banks and businesses has bolstered its market dominance and stifled potential competitors. Attorney General Merrick Garland stated that Visa has unlawfully gained the power to charge fees significantly higher than it could in a competitive market. He explained that merchants and banks pass these costs on to customers, either by raising prices or reducing the quality or service, thereby affecting the price of almost everything.
In response, Visa’s General Counsel Julie Rottenberg labeled the DOJ’s lawsuit as “meritless” and expressed the company’s intention to defend itself vigorously in court. In an emailed statement to Engadget, Rottenberg stated, “Today’s lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving.” She emphasized that Visa’s appeal to businesses and consumers lies in its secure and reliable network, world-class fraud protection, and the overall value it provides. Rottenberg concluded by affirming pride in the payments network Visa has built, the innovation it advances, and the economic opportunity it enables.