The Unites States Department of Justice has filed a lawsuit against Visa, accusing the financial giant of illegally monopolizing the debit card market.
The complaint, lodged in federal court in New York on Tuesday, alleges that Visa has exploited its dominant position in the industry for over a decade.
The department claims that Visa’s tactics have forced businesses to use its debit card network, excluding competitors, and have stifled the emergence of alternative options.
Attorney General Merrick Garland commented on the case, stating, “We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market.”
He further explained that these costs are ultimately passed down to consumers, either through higher prices or diminished quality and services, impacting the overall economy.
“As a result, Visa’s unlawful conduct affects not just the price of one thing – but the price of nearly everything,” Garland emphasized.
Visa, which handles more than 60% of debit transactions in the United States, allegedly charges over $7 billion annually in processing fees, according to the Justice Department.
The lawsuit contends that Visa maintains its grip on the market by imposing exclusivity agreements that penalize merchants and banks who might consider processing transactions through alternative systems.
These agreements have effectively insulated Visa from meaningful competition.
The department further alleges that Visa suppresses potential competitors by converting them into partners, offering financial incentives in exchange for cooperation.
The DOJ noted in a press release, “Visa also induces would-be competitors to become partners instead of entering the market as competitors by offering generous monetary incentives and threatening punitive additional fees.”
This strategy, the lawsuit argues, was designed to prevent any significant loss of market share, revenue, or the possibility of Visa being overtaken by a competing network.
For years, retailers and merchants have voiced their frustrations over the fees Visa and other credit card companies charge for processing transactions.
Earlierin March 2924, a group of merchants agreed to settle a longstanding antitrust lawsuit with Visa and Mastercard for $30 billion.
However, this settlement faced opposition from the National Retail Foundation, a key trade group representing retailers, which argued that the amount was insufficient given the widespread use of Visa and Mastercard’s terminals.
In June, a federal judge agreed, rejecting the settlement and insisting that the credit card companies make greater concessions to resolve the issue.
This latest antitrust action against Visa is part of a broader crackdown by the Justice Department on corporate monopolies.
In recent months, the department has also filed lawsuits against a major real estate firm accused of artificially inflating rents and against Ticketmaster’s parent company, Live Nation. In a related development, the department convinced a federal judge to rule that Google violated antitrust laws with its search business.
The suit against Visa also follows a previous DOJ intervention in 2020, when the department sued to block Visa’s $5.3 billion merger with fintech startup Plaid, a deal that was subsequently scrapped.
