The United States has filed a lawsuit against Visa for allegedly illegally monopolizing the debit card market, which costs consumers and businesses billions of dollars. This was stated by the US Department of Justice, which filed the lawsuit, reports UNN.
Details
The agency alleges that for more than a decade, Visa has abused its dominant market position to stifle competition. The complaint states that Visa penalizes retailers and banks that use alternative technologies to process debit transactions.
The company itself receives a commission from each transaction that goes through its network.
According to the Justice Department's complaint, 60% of debit transactions in the United States are made through Visa's network, allowing it to collect more than $7 billion a year in fees.
We allege that Visa has been unlawfully able to charge fees that are significantly higher than what it could charge in a competitive market. Merchants and banks pass these costs on to consumers, either by raising prices or by reducing quality or service. As a result, Visa's unlawful actions affect not only the price of one product, but the price of almost everything
The US Department of Justice said that Visa enjoys a huge volume of transactions through its network and requires banks and retailers, as well as financial institutions that issue debit cards, to conduct a certain number of transactions through Visa.
This makes it difficult for merchants to use alternatives, including cheaper or smaller payment processors, as they are subject to “disloyalty penalties” from Visa, as described by the Department of Justice.
Recall
The U.S. Department of Justice and 16 state prosecutors have filed an antitrust lawsuit against Apple, accusing the iPhone maker of illegally monopolizing the smartphone market.