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Visa slapped with a DOJ antitrust lawsuit

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The Department of Justice (DOJ) filed an antitrust lawsuit against Visa. The lawsuit alleges that the financial firm holds a monopoly over debit network markets allowing it to charge banks and markets with exorbitant fees that get passed onto consumers and keep rival companies like PayPal and Square from competing on their level.

Bloomberg first reported on Monday that the DOJ planned to file an antitrust suit against Visa following a multiyear investigation into Visa’s business practices starting in 2020. Visa attempted to acquire the fintech startup Plaid with a $5.3 billion bid but the DOJ filed a lawsuit blocking the deal claiming the acquisition would eliminate a competitive threat that challenged Visa’s powerful control of debit markets.

Visa dropped the bid a year later to avoid any further legal entanglements but the DOJ continued investigating Visa’s business practices.

The DOJ alleges in its latest lawsuit that Visa’s “web of exclusionary agreements” with banks and businesses helped strengthen its market dominance and “smother” any potential competitors. Attorney General Merrick Garland said in a statement that Visa “unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market.

“Merchants and banks pass along those costs to customers, either by raising prices or reducing quality or service,” the statement reads. “As a result, Visa’s unlawful conduct affects not just the price of one thing — but the price of nearly everything.”

Visa's General Counsel Julie Rottenberg told Engadget in an emailed statement that the DOJ's lawsuit is "meritless" and that they plan to vigorously defend themselves in court. 

"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 by email. "When businesses and consumers choose Visa, it is because of our secure and reliable network, world-class fraud protection, and the value we provide. We are proud of the payments network we have built, the innovation we advance, and the economic opportunity we enable."

This article originally appeared on Engadget at https://ift.tt/mWsEFKk

from Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics https://ift.tt/mWsEFKk
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