US Justice Department sues VisaWednesday 25 September 2024 10:04 CET | NewsMultinational payment card services corporation Visa has been sued by the US Justice Department for monopolising the debit card market while also charging substantial fees and inhibiting competition. Filed on 24 September 2024 in the US District Court for the Southern District of New York, the civil antitrust lawsuit charged Visa for violating sections 1 and 2 of the Sherman Act as over 60% of debit transactions in the US run on Visa’s debit network. Currently, Visa charges over USD 7 billion in fees each year to process those transactions.The reason behind Visa’s lawsuitAccording to the civil antitrust lawsuit, Visa is alleged to have unlawfully amassed the capability to extract fees that exceed what it could charge in a competitive market. Also, merchants and banks transfer those funds to consumers by increasing prices or by decreasing quality of service. This leads to Visa’s unlawful conduct affecting the price of nearly everything, as detailed by representatives from the US Justice Department.The authority mentioned that the lawsuit was filed against Visa to restore competition in the market and to benefit the US public, as the department accused Visa of leveraging exclusionary practices to guard its business in the debit market. The litigation also underlined that Visa has a worldwide operating income of USD 18.8 billion and charges nearly USD 8 billion in network fees on US debit volume each year. At a global level, the firm processes about USD 12.3 trillion in total payment volume.Moreover, how Visa, as well as other similar corporations, conduct their operations negatively impacts US residents and the region’s economy. The current proceedings taken by the Justice Department highlight that the authority supports competition in the market and would take action against any company that restrains it, enforcing the law on behalf of US-based individuals.When commenting on the lawsuit, representatives from Visa underlined that their company focuses on building a payment network that advances innovation, as well as provides economic opportunities for the overall environment.Visa and Mastercard’s antitrust lawsuitThe current court case opened by the Justice Department follows Visa and Mastercard’s antitrust lawsuit from July 2023, when the two corporations faced scrutiny over trying to fix inflated interchange fees and maintaining market power. Block, which directly contracted with Visa and Mastercard through its Square payment processing platform to facilitate card transactions for numerous merchants, filed the lawsuit, saying that companies that utilise its services did not need to pay interchange fees, but instead, they were required to pay a separate set of fees that were set by the firm for its payment and transaction solutions. Block accused both Visa and Mastercard of increasing one of the fees that Square paid directly based on the number of locations a merchant or a trader had.
Visa still at it totally corrupted. Take note ASX ASIC Media
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