Note
On September 24, 2024 local time, the U.S. Department of Justice (DOJ) filed an antitrust lawsuit against payment brand Visa in the U.S. District Court for the Southern District of New York.
Office of Public Affairs | Justice Department Sues Visa for Monopolizing Debit Markets | United States Department of Justice
https://www.justice.gov/opa/pr/justice-department-sues-visa-monopolizing-debit-markets
file-stamped_visa_complaint_9.24.24.pdf
(PDF file)https://www.justice.gov/opa/media/1370421/dl
Visa (V) Faces US Justice Department Antitrust Case Over Debit Cards – Bloomberg
https://www.bloomberg.com/news/articles/2024-09-23/visa-faces-justice-department-antitrust-case-over-debit-cards
The DOJ sues Visa for locking out rival payment platforms – The Verge
https://www.theverge.com/2024/9/24/24253280/doj-antitrust-lawsuit-visa-debit-monopoly
DOJ to launch antitrust lawsuit against Visa starting in 2021investigationThe trial is expected to follow on from that investigation.
In the United StatesDebit CardMore than 60% of all transactions in the U.S. are carried out on Visa’s debit network. Visa also earns $7 billion a year just from payment processing fees, and the DOJ criticized Visa for “using its dominance, size, and importance to the debit ecosystem to force exclusive contracts on merchants and banks.”
The DOJ further alleges that “Visa imposes punitive surcharges on customers who switch to another debit network or alternative payment system for their transactions in order to crowd out smaller, lower-fee competitors. By imposing these penalties on customers, Visa discourages potential competitors from entering the market and induces them to partner with Visa. Visa employs these penalties and other mechanisms out of fear of losing market share and revenue, or being completely replaced by another debit network.”
Attorney General Merrick Garland said, “We believe that Visa has illegally obtained the power to collect fees far in excess of what could be charged in a competitive market. As a result, stores and banks are forced to raise prices and reduce the quality and service of their products, passing on these exorbitant fees to consumers. Visa’s illegal conduct affects the price of nearly every product.”
The DOJ said, “Visa’s systematic efforts to limit competition in the debit transaction market have resulted in billions of dollars in additional fees for American consumers and businesses and slowed innovation in the debit payments ecosystem.” In addition, Deputy Attorney General Benjamin Mizer said, “Anti-competitive conduct by companies like Visa hurts the American people and our economy as a whole. This lawsuit against Visa makes it clear that DOJ will not hesitate to enforce the law to protect the American people against companies that seek to stifle competition rather than compete on price and invest in innovation.”
Following this lawsuit, Visa’s stock price fell 1.95% from the previous day on September 23, 2024. At the time of writing, Visa has not commented on this lawsuit.
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