The Justice Department sued Visa for allegedly stifling competition in the market for debit card payments.
A complaint filed in the Southern District of New York on Sept. 24 alleged that the credit card giant violated Sections 1 and 2 of the Sherman Antitrust Act.
“We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market,” Attorney General Merrick Garland said in a statement. “Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service. As a result, Visa’s unlawful conduct affects not just the price of one thing—but the price of nearly everything.”
The complaint quoted Visa’s former chief financial officer saying: “[E]verybody is a friend and partner. Nobody is a competitor.”
It stated that “more than 60% of debit transactions run on Visa’s debit network, allowing it to charge $7 billion in fees each year.” Visa, the complaint added, Visa penalized disloyalty among merchants and incentivized cooperation from competitors.
“Visa offers lucrative incentives, sometimes worth hundreds of millions of dollars annually, to these potential competitors under the express condition that they do not develop a competing product or compete in ways that could threaten Visa’s dominance,” the complaint read.
Visa General Counsel Julie Rottenberg described the lawsuit as “meritless” in a statement provided to The Epoch Times.
“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,” Rottenberg said. “When businesses and consumers choose Visa, it is because of our secure and reliable network, world-class fraud protection, and the value we provide … This lawsuit is meritless, and we will defend ourselves vigorously.”
The lawsuit came as DOJ litigated a separate antitrust lawsuit against Google in the Eastern District of Virginia. That was one of many antitrust lawsuits the department and Federal Trade Commission have brought against corporations in recent years.
The Associated Press contributed to this report.
From The Epoch Times