US Sues Visa, Alleging Monopoly Over Debit Card Market

The U.S. Department of Justice has filed a lawsuit against Visa, accusing the financial giant of illegally maintaining its dominance in the debit card market through anti-competitive practices. The suit claims Visa punished companies seeking alternative payment networks and paid off potential competitors to preserve its hold on the market, resulting in higher fees and stifling innovation.

Visa processes over 60% of debit transactions in the U.S., generating $7 billion in fees annually. The DOJ began investigating Visa in 2021, and now alleges that the company used exclusive contracts to keep businesses tied to its network, charging higher fees to those who sought alternatives.

Attorney General Merrick Garland emphasized that Visa’s practices led to inflated prices for consumers across a wide range of goods and services, with merchants and banks passing the costs down the line.

Visa has denied the allegations, calling the lawsuit “meritless.” Julie Rottenberg, the company’s general counsel, stated that Visa operates in a competitive and growing debit market, and the lawsuit overlooks this reality.

The case is part of a broader push by the Biden administration to challenge monopolistic behavior in various industries. The outcome could reshape the debit card market, potentially opening more space for competition in the payment processing sector.