The US Department of Justice has filed an antitrust lawsuit against payment service giant Visa for its alleged monopoly over the debit card network.
The DOJ says Visa has been engaging in anticompetitve business practice by suppressing competition and innovation, in turn violating Sections 1 and 2 of the Sherman Act.
It claims Visa controls over three in five US debit transactions, resulting in $7 billion in processing fees annually.
Visa accused of monopolistic practices
The US government’s lawsuit argues Visa has maintained its dominance of the payments market by striking up exclusionary agreements that penalize merchants and banks for using its competitors.
In doing so, US officials say consumers have had to deal with inflated costs, while smaller payment processors and fintech companies have been unable to grow. The DOJ also found Visa guilty of partnering up with would-be competitors by offering generous monetary incentives in order to “insulate itself” from competition.
Attorney General Merrick B. Garland confirmed: “We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market.”
Principal Deputy Associate Attorney General Benjamin C. Mizer added: “Today’s action against Visa reminds those who would stifle competition rather than competing on price or investing in innovation that the Justice Department will never hesitate to enforce the law on behalf of the American people.”
This isn’t the first time that Visa has come under fire in the US. In 2020, the DOJ set out to stop the company from acquiring fintech app technology company Plaid. The proposed $5.3 billion deal was indeed called off.
TechRadar Pro has asked Visa to respond to the DOJ’s announcement, but the company did not immediately respond.
More from TechRadar Pro
- Judge rules Google has illegal search monopoly and you might not like what comes next
- These are the best payment gateways to take your store online
- Check out our roundup of the best ecommerce platforms
