The DOJ's allegations, as reported by Fox Business, suggest that Visa is responsible for processing over 60 percent of all debit card transactions, raking in more than $7 billion in transaction fees.
According to The Post Millennial, the DOJ's lawsuit alleges that Visa has managed to maintain its stranglehold on the market by suppressing competition through illicit means. The company's tactics reportedly include enforcing exclusive agreements with merchants and banks, thereby "insulating itself from competition, and smothering smaller, lower-priced competitors."
In a statement, Attorney General Merrick Garland expressed his concerns over Visa's alleged practices. "We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market," Garland said. He further explained that these excessive fees are often passed on to consumers, either through increased prices or reduced quality of service. "As a result, Visa's unlawful conduct affects not just the price of one thing – but the price of nearly everything."
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The DOJ's lawsuit also accuses Visa of manipulating potential competitors into becoming partners instead of rivals. The company allegedly achieves this by offering attractive financial incentives and threatening to impose punitive additional fees. The lawsuit also claims that Visa employs a "deliberate and reinforcing course of conduct to cut off competition and prevent rivals from gaining the scale, share, and data necessary to compete for customers' business."
September 26, 2024
The DOJ likens Visa's business strategy to the construction of an "enormous moat" to safeguard its commercial interests. However, Visa has categorically denied these allegations. In a statement to Fox Business, Visa General Counsel Julie Rotenberg defended the company's position. "Anyone who has bought something online, or checked out at a store, knows there is an ever-expanding universe of companies offering new ways to pay for goods and services," she said.
Rotenberg further argued that Visa is merely one of many competitors in a rapidly growing debit space, where new entrants are flourishing. She attributed Visa's success to its "secure and reliable network, world-class fraud protection, and the value we provide." She concluded by stating, "We are proud of the payments network we have built, the innovation we advance, and the economic opportunity we enable. This lawsuit is meritless, and we will defend ourselves vigorously."
