Los Angeles (TDI): In a lawsuit, the US has accused Visa of unlawfully suppressing competition in order to keep its monopoly on the debit card industry.
According to the report, Visa bought out possible rivals to maintain its monopoly on the market and penalized businesses who wished to use alternative payment networks.
The Department of Justice said that the actions had seriously increased costs for American businesses and consumers and delayed innovation.
Visa said that the charges were “meritless” and that it would mount a legal defense.
General Counsel for Visa Julie Rottenberg stated that Visa’s “secure and reliable network” is why customers and companies selected the card.
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“The lawsuit filed today ignores the fact that there are other rivals, including Visa, in the expanding debit market with successful new entrants. We will actively defend ourselves because this case lacks merit,” she added.
With its latest competition case against Visa, the Biden administration has demonstrated that it is more aggressive than prior administrations when it comes to monopoly issues, which are known as antitrust in the US.
Lawyers and competition authorities from other regions of the world, such as Europe and Australia, have also brought legal action against the company for its actions. Investigating Visa began in 2021 with the Department of Justice.
The complaint claims that the corporation handles over 60% of debit transactions in the US and earns $7 billion in fees every year.
By revenue, its debit card division outpaced its credit card division as of 2022 and was very lucrative.
Visa was able to charge fees that were significantly greater than what it could have in a “competitive market” due to its dominance, according to Attorney General Merrick Garland.
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He said, “By increasing prices or lowering quality or service, banks and merchants pass those expenses through to customers.
Visa’s illegal actions therefore have an impact on almost everything’s price, not just one particular item.”
The company’s shares dropped by over 5%.
The case was filed in federal court in New York and claimed that Visa had engaged in the illegal creation of “exclusive deals” by using a “web of contracts” that obliged companies to commit to routing a specific amount of transactions to the Visa network or risk increased costs.
