The Department of Justice is taking action against Visa for allegedly monopolizing the U.S. debit card market, but how will this legal battle play out?
At a Glance
- On Tuesday, the U.S. DOJ launched a lawsuit Visa for monopolizing the debit card market.
- The lawsuit follows an investigation into Visa’s potentially anticompetitive practices.
- The DOJ issued an investigative demand to Visa in 2023 for documents and information.
Department of Justice to Sue Visa
The U.S. Department of Justice (DOJ) is preparing to sue Visa for allegedly monopolizing the debit card market through anticompetitive practices, according to a report by the Economic Times. The lawsuit follows an investigation into Visa’s actions that may have hindered competition and increased merchant fees. This probing began back in 2021.
Details of the Investigation
The DOJ’s antitrust division filed a lawsuit in federal court on Tuesday. Sources indicate that the DOJ accuses Visa of preventing competitors from challenging its dominance in the debit card market. Visa and the DOJ have not yet made any public comments about the matter.
The probe, initiated in 2021, investigated if Visa’s practices complied with applicable laws. In 2023, the DOJ issued an investigative demand to Visa for documents related to its debit card practices.
Key accusations include using exclusive agreements that hinder rivals and prevent tech companies from entering the market. This comes after the DOJ blocked a $5.3 billion acquisition of Plaid by Visa in 2020.
Google faces another DOJ antitrust lawsuit over alleged ad-tech monopoly https://t.co/LiUZ1GdoAR
— FOX Business (@FoxBusiness) September 9, 2024
Broader Implications
This lawsuit is part of a broader initiative by the Biden administration to crack down on corporate monopolies and promote competition. The DOJ and FTC have also pursued antitrust cases against major tech companies like Google, Apple, Amazon, and Meta.
The lawsuit focuses on Visa’s use of volume-based discounts and tokenization technology, which allegedly discourage merchants from switching to alternative networks. Potential outcomes could include financial penalties and changes to Visa’s pricing schemes.
The U.S. Department of Justice is preparing to file an antitrust lawsuit against Visa $V for allegedly monopolizing the American debit card market, per Bloomberg.
Interestingly, back in July, Nancy Pelosi disclosed selling 2,000 shares of her Visa holdings. https://t.co/wXA1pWBa9C pic.twitter.com/Z1OeyfUdwT
— Wall St Engine (@wallstengine) September 23, 2024
Sources:
- US DOJ to sue Visa over debit card market monopoly: Reports
- Visa faces US DOJ antitrust case over illegally monopolising debit card mkt
