At the end of September, the U.S Department of Justice filed a lawsuit against the Visa. The DOJ alleges the largest payment network in the world is effectively a monopoly. But, is there any weight to these hefty claims? It depends on who you ask…
Allegations of Visa Bullying Businesses
On September 24, 2024, Attorney General Merrick Garland filed a lawsuit against Visa in New York. The antitrust case claims Visa caused additional fees to banks, consumers, and merchants.
Merrick Garland included this in his official statement:
“We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market. 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.”
Via CNBC
Some of that “unlawful conduct” includes penalizing banks for using other debit services with exclusionary agreements.
These claims are bolstered by the fact that 60% of debit transactions are processed through Visa in the United States.
But, the famous company is not taking these accusations lightly…
Visa Discredits Lawsuit
Naturally, the accused released their statement on the subject vehemently denying it.
Visa’s general counsel, Julie Rottenburg submitted a public response:
“Anyone who has bought something online, or checked out at a store, knows there is an ever-expanding universe of companies offering new ways to pay for goods and services. 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. We are proud of the payments network we have built, the innovation we advance, and the economic opportunity we enable.”
Of course, all of these things will come to a conclusion in front of the judge. However, the DOJ says winning the case may have an interesting side effect…
Could Department of Justice Vs. Visa Lawsuit Advance Tech?
The DOJ filed as a part of its lawsuit against Visa that it also paid competitors in order to…
“BLUNT THE RISK THEY DEVELOP INNOVATIVE NEW TECHNOLOGIES THAT COULD ADVANCE THE INDUSTRY BUT WOULD OTHERWISE THREATEN VISA’S MONOPOLY PROFITS.”
This has put Visa’s agreements with Apple, PayPal, and other service providers under scrutiny.
We will have to wait until the resolution of this case to see if the allegations hold water. Or, if the ruling will change how Americans do business…
Be Great,
GCTV Staff
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