The Biden administration has filed a lawsuit against Visa, accusing the company of violating antitrust laws.
The Department of Justice determined that Visa’s debit card network has monopolized the market by impacting nearly all prices.
According to outlets like CNBC, the antitrust lawsuit was filed on Tuesday against Visa, the world’s largest credit card company. The Department of Justice alleges that Visa has forced its partners into contracts designed to exclude competitors, stifling competition and dominating the market.
In the complaint submitted to the federal court in New York, the Department stated that Visa had collected billions of dollars in additional fees from American consumers and merchants engaging in monopolization and other various illegal activities.
Attorney General Merrick Garland asserted in a statement, “We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market.”
Garland noted, “Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service.” He criticized Visa’s illegal actions, stating, “As a result, Visa’s unlawful conduct affects not just the price of one thing — but the price of nearly everything.”
Over the past 20 years, Visa and MasterCard have rapidly expanded with the rise of online commerce, and their combined market capitalization is nearing $1 trillion. Their market dominance surged as consumers increasingly opted to pay with their credit and debit cards instead of cash.
According to the Department of Justice, over 60% of U.S. debit transactions are conducted via Visa cards, generating over $7 billion in fees.
The Biden administration isn’t the only one watching these companies. In 2020, the Trump administration filed an antitrust lawsuit against Visa to block its acquisition of fintech company Plaid. Visa intended to fight the legal battle but ultimately backed down and broke off the merger agreement valued at $5.3 billion.
