DOJ Sues Visa For Locking Out Rival Payment Platforms

The Department of Justice has filed an antitrust lawsuit against Visa, alleging that the financial services firm has an illegal monopoly over debit network markets and has attempted to unlawfully crush competitors, including fintech companies like PayPal and Square. From a report: The lawsuit follows a multiyear investigation of Visa which the company disclosed in 2021. '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.'

Visa makes more than $7 billion a year in payment processing fees alone, and more than 60 percent of debit transactions in the United States run on Visa's network, the complaint claims. The government alleges that Visa's market dominance is partly due to the 'web of exclusionary agreements' it imposes on businesses and banks. Visa has also attempted to 'smother' competitors -- including smaller debit networks and newer fintech companies -- the complaint alleges. Visa executives allegedly feel particularly threatened by Apple, which the company has described as an 'existential threat,' the DOJ claims.

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