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The Department of Justice (DOJ) on Tuesday Lawsuit against VisaThey claimed the company maintained an illegal monopoly on the U.S. debit card market.
According to the Department of Justice complaint: Debit Card Transactions In the United States, it operates on the Visa debit network, and the company charges more than $7 billion each year in fees for processing these transactions.
The Justice Department also accused Visa of illegally maintaining its monopoly power by isolating itself from competition. As an example, the Justice Department said Visa has entered into exclusive agreements with merchants and banks that use its debit card services to limit the volume of debit card transactions, “insulating itself from competition and suffocating smaller, lower-cost competitors.”
“We allege that Visa has illegally amassed the power to collect fees far in excess of what it could charge in a competitive market,” Attorney General Merrick Garland said in a statement. “Retailers and banks then pass these costs on to consumers, either by raising prices or reducing quality and service. As a result, Visa's unlawful conduct affects not just the price of one thing, but the price of nearly everything.”
Credit card delinquency rates hit highest level since 2012, according to latest Federal Reserve survey
The Department of Justice filed suit alleging that Visa maintained a monopoly on the debit card market. (Photographer: Andrew Haller/Bloomberg via Getty Images/Getty Images)
The Justice Department's complaint also said Visa “incentivized potential competitors to partner with it rather than enter the market as a competitor by offering large financial incentives or threatening punitive surcharges.”
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| Five | Visa Inc. | 288.63 | +3.86 |
+1.36% |
Visa engaged in “intentional and redoubled conduct” Cut off the competition “Visa is using its scale to leverage both retailers and consumers to build a massive moat around its business,” the Justice Department said.
FOX Business has reached out to Visa for comment on the lawsuit.
Attorney General Merrick Garland said Visa used its power in the debit market to collect excessive fees from merchants while choking off competition. (Photo by Chip Somodevilla/Getty Images/Getty Images)
Visa, Mastercard likely to handle $30 billion+ swipe fee settlement: Judge
Visa and rival MasterCard have faced legal scrutiny in recent months. This summer, a federal judge ruled Rejected $30 billion settlement Lawsuit related to swipe fees (also known as interchange fees) that card issuers charge merchants for processing transactions.
The settlement lowers and caps swipe fees, saving retailers an estimated $6 billion a year.
Visa and Mastercard were recently denied a $30 billion settlement in a lawsuit over excessive fees charged to merchants for card payments, but a judge said the companies could afford to award a much larger judgment. (Photo by Angus Mordaunt/Bloomberg via Getty Images/Getty Images)
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The judge said the amount was “minuscule” compared with the roughly $100 billion in fees paid to Visa and Mastercard in 2023, and that the evidence “strongly suggests Visa and Mastercard can withstand a significantly larger judgment.”
Visa shares fell more than 4.3% on Tuesday after reports that the U.S. Department of Justice is preparing to file a lawsuit against the financial services giant.
