Jody Godoy
(Reuters) – The U.S. Division of Justice sued Visa (NYSE: ) on Tuesday for alleged violations of antitrust legal guidelines, accusing one of many world’s largest funds networks of stifling competitors by threatening retailers with hefty charges and bribing potential rivals.
The U.S. Division of Justice says Visa handles greater than 60% of all debit transactions within the U.S. and costs $7 billion in charges every year for transmitting transactions over its community. Prosecutors stated the corporate protected that dominance by hanging offers with card issuers, retailers and opponents.
Addressing these charges, typically known as swipe or interchange charges, is a part of the Biden administration’s effort to fight rising shopper costs, a battle between Democrat Kamala Harris and Republican Donald Trump 11 A serious concern within the presidential election on Might 5.
“Visa’s unlawful conduct impacts not simply the worth of 1 merchandise, however the worth of practically all the things,” Lawyer Basic Merrick Garland stated in an announcement, noting that retailers and banks cross on cost community prices to shoppers.
A senior Justice Division official stated Visa’s alleged anticompetitive conduct started round 2012, when competing corporations entered the funds area following reforms that required card issuers to adapt to unaffiliated networks.
The lawsuit seeks a request from a Manhattan decide to revive competitors in providers that course of debit funds on-line and in shops.
The Justice Division’s antitrust division started investigating Visa’s monetary card enterprise in 2021, and in the identical 12 months blocked Visa’s acquisition of fintech firm Plaid. Rival Mastercard (NYSE: ) stated in April it was additionally beneath investigation by the Justice Division.
For practically 20 years, the 2 corporations have been locked in litigation over their dominance of the bank card market.
Visa and Mastercard agreed in 2019 to pay US retailers $5.6 billion to settle harm claims in a category motion lawsuit alleging anticompetitive conduct.
A federal decide in Brooklyn in June rejected a parallel settlement that might have decreased card swipe charges by about $30 billion over 5 years and required Visa and Mastercard to raise some bans on retailers charging prospects for utilizing their playing cards. laws.
Visa has put aside about $1.6 billion for potential settlements in different U.S. instances associated to interchange charges.
