The U.S. Justice Department is suing Visa, accusing the company of abusing its market dominance to stifle competition for more than a decade.The antitrust lawsuit, filed in federal court in New York, alleges that Visa penalizes merchants and banks that don’t use its payment processing technology for debit transactions, despite other available options. “Visa’s unlawful conduct affects not just the price of one thing, but the price of nearly everything,” U.S. Attorney General Merrick Garland said. The complaint states that more than 60% of debit transactions in the U.S. take place on Visa’s debit network, allowing Visa to collect more than $7 billion in processing fees. “That will tend to create what economists call deadweight loss, which means that there’s some people who are going to be priced out and who won’t be able to purchase goods because the prices are increased, because Visa is collecting that money,” said Daniel Pi, assistant professor at the University of New Hampshire Franklin Pierce School of Law. Pi added that the case could take several years to resolve, likely followed by an appeal. Visa has not yet responded to the lawsuit.
The U.S. Justice Department is suing Visa, accusing the company of abusing its market dominance to stifle competition for more than a decade.
The antitrust lawsuit, filed in federal court in New York, alleges that Visa penalizes merchants and banks that don’t use its payment processing technology for debit transactions, despite other available options.
“Visa’s unlawful conduct affects not just the price of one thing, but the price of nearly everything,” U.S. Attorney General Merrick Garland said.
The complaint states that more than 60% of debit transactions in the U.S. take place on Visa’s debit network, allowing Visa to collect more than $7 billion in processing fees.
“That will tend to create what economists call deadweight loss, which means that there’s some people who are going to be priced out and who won’t be able to purchase goods because the prices are increased, because Visa is collecting that money,” said Daniel Pi, assistant professor at the University of New Hampshire Franklin Pierce School of Law.
Pi added that the case could take several years to resolve, likely followed by an appeal.
Visa has not yet responded to the lawsuit.
