He United States Department of Justice sued Visa Inc. for illegally monopolizing the debit card marketin the Biden administration’s first major antitrust case involving the financial industry.
According to the complaint filed in federal court in Manhattan, Visawhich handles more than 60% of debit transactions in USAandentered into a series of agreements that penalized traders seeking to use alternatives and paid potential rivals not to enter the market. Visathe largest payment network in USAcharges about $7 billion in annual fees for debit and card-not-present transactions.
The complaint alleges that Visa imposed an anti-competitive pricing structure that forced merchants to conduct all debit transactions through its network or face severe penalties. Visa also struck deals with tech companies like PayPal, Apple and Block, paying them hundreds of millions of dollars to stay out of the market.
He Department of Justice It also alleges that Visa began requiring agreements with onerous terms for merchants in response to the Dodd-Frank Act of 2012, which sought to increase competition in the debit card market.The law set limits on the fees banks can charge merchants for accepting debit cards, but did not set limits on the fees debit networks can charge for processing transactions.
Visa It also sought to curb the development of new technologies that would allow consumers to bypass its network when making online purchases. One example is the agreement with PayPal in 2016.in which PayPal pledged not to encourage Visa card users to link their bank accounts to their digital wallets.
This case is the result of a multi-year investigation into the business practices of Visa, initiated after its failed attempt to acquire financial infrastructure company Plaid Inc.. in 2021
