The credit card giant is accused of violating the Sherman Antitrust Act.
The Justice Department sued Visa for allegedly stifling competition in the market for debit card payments.
A complaint filed in the Southern District of New York on Sept. 24 alleged that the credit card giant violated Sections 1 and 2 of the Sherman Antitrust Act.
“We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market,” Attorney General Merrick Garland said in a statement. “Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service. As a result, Visa’s unlawful conduct affects not just the price of one thing—but the price of nearly everything.”
The complaint quoted Visa’s former chief financial officer saying: “Everybody is a friend and partner. Nobody is a competitor.”
It stated that “more than 60% of debit transactions run on Visa’s debit network, allowing it to charge $7 billion in fees each year,” and alleged that Visa penalized disloyalty among merchants and incentivized cooperation from competitors.
“Visa offers lucrative incentives, sometimes worth hundreds of millions of dollars annually, to these potential competitors under the express condition that they do not develop a competing product or compete in ways that could threaten Visa’s dominance,” the complaint reads.
Visa General Counsel Julie Rottenberg described the lawsuit as “meritless” in a statement provided to The Epoch Times.
“Today’s lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving,” Rottenberg said. “When businesses and consumers choose Visa, it is because of our secure and reliable network, world-class fraud protection, and the value we provide. … This lawsuit is meritless, and we will defend ourselves vigorously.”The DOJ is currently litigating a separate antitrust lawsuit against Google in the Eastern District of Virginia. That is one of many antitrust lawsuits the department and Federal Trade Commission have brought against corporations in recent years.
The DOJ has also sued Apple, Live Nation, and real estate software firm RealPage, among others.
During a press conference on Sept. 24, Garland was asked whether there was any concern that the antitrust division was stretching itself too thin in pursuing so many cases. Garland simply replied, “No.”
On Aug. 8, the DOJ won another antitrust lawsuit against Google in the U.S. District Court for the District of Columbia, with Judge Amit Mehta declaring its activity in searching and advertising an illegal monopoly.
Google has vowed to appeal the decision. Both Google and Apple, which the DOJ sued over its practices in the smartphone market, have argued that the DOJ failed to allege actual legal violations, as well as presenting false definitions of relevant markets.
Antitrust remedies can involve large-scale changes, such as forcing companies to break up sections of their businesses.
Principal Deputy Assistant Attorney General for the Antitrust Division Doha Mekki was asked during the Sept. 24 press conference about potential remedies.
She declined to speculate on what remedies would ultimately look like, stating that “ultimately, the job of a court will be, if we are successful in proving up liability, to unfetter the markets of any found liability, including monopolization, and to prevent their recurrence in the future.”
“And that can be a range of potential things,” she said.
The DOJ’s complaint requested a wide range of potential relief, including “enter[ing] such relief as needed to cure the anticompetitive harm from all of Visa’s unlawful actions.”
It listed eight separate ways for the court to enjoin Visa’s actions, including “imposing pricing or incentive structures, such as cliff pricing, that discourage or eliminate competition from rivals, potential rivals, or customers.” Another requested the court “enjoin Visa from continuing to engage in the anticompetitive practices.”
The Associated Press contributed to this report.