Visa antitrust suit filed by the DOJ on September 24.
On September 24th, the US Department of Justice (DOJ) filed a civil antitrust lawsuit against Visa, accusing it of illegally monopolizing the US debit card market. The DOJ alleges that Visa has engaged in illegal activity, dating back to 2012, which has “resulted in billions of dollars in additional fees imposed on American consumers and businesses and slowed innovation in the debit payments ecosystem.”
According to the DOJ, 60% of US debit transactions go through Visa’s network, generating more than $7 billion in fees for the company on an annual basis.
It is alleged that Visa used pricing, volume discounts, and prohibitions on the use of competing debit networks to impede the growth of competitors. Additionally, Visa is accused of seeking to undermine startups that posed a competitive threat, as well as paying companies, including Apple, to limit payments innovation. The lawsuit seeks to end Visa’s anticompetitive practices but does not seek the break-up of the company.
Visa vowed to vigorously defend itself in court, calling the lawsuit “meritless.” Litigation is expected to continue for several years. Shortly after the lawsuit was filed, Visa added $1.5 billion to a litigation escrow account.
In October, Visa was hit with a new merchant class action suit piggybacking on the DOJ lawsuit. Advertising and marketing company All Wrapped Up Signs and Graphix filed the proposed class action suit.
For more information, see the DOJ press release and these articles from Wall Street Journal and Reuters.
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