The U.S. Justice Department is suing Visa (V), accusing the credit card giant of holding an illegal monopoly over debit payments.
The Justice Department has filed a civil antitrust lawsuit against Visa claiming that the San Francisco-based company imposes exclusionary agreements on its partners to control its dominant market position.
The Justice Department also alleges that Visa, which operates the world’s biggest payments network, of threatening merchants with punishing fees if they route debit transactions to competitors.
Visa called the Justice Department’s lawsuit “meritless” and vowed to fight the government in court. This is not the first time that the U.S. Justice Department has targeted Visa.
In 2020, the Justice Department filed suit to block Visa’s proposed $5.3 billion U.S. acquisition of financial technology company Plaid. Visa ended up abandoning the proposed takeover.
In its filing in a New York court, the U.S. government claims that more than 60% of debit card transactions in the U.S. are handled by Visa’s payment system.
The Justice Department also said that Visa charges more than $7 billion U.S. annually in processing fees to merchants and other customers.
Visa’s stock sank 5% on news of the antitrust lawsuit. However, the company’s share price is up 17% over the past year and trading at $272.78 U.S. per share.
