US Department of Justice Files Antitrust Lawsuit Against Visa...Stock Drops 5.5%

The U.S. Department of Justice filed an antitrust lawsuit against financial payment company Visa on the 24th (local time).

According to the complaint submitted to the U.S. District Court for the Southern District of New York on the same day, Visa has abused its dominant position in the debit card market for over 10 years by forcing merchants to use the Visa network instead of competitors' networks and blocking new payment methods from entering the market.

In this process, it was confirmed that Visa imposed high fees and penalties on merchants who did not use the Visa network. It was also found that Visa paid tens of millions of dollars to technology companies developing alternative products such as PayPal and Apple in exchange for not entering the market.

U.S. Attorney General Merrick Garland stated, "We allege that Visa has unlawfully accumulated the power to charge fees far exceeding what would be allowed in a competitive market," adding, "Merchants and banks passed these costs on to consumers by raising prices or lowering quality and service. As a result, Visa's illegal conduct affects the prices of most transactions."

Visa processes more than 60% of debit card transactions in the United States. The fees generated from this are estimated to be around $7 billion annually. The Department of Justice is reported to have been investigating Visa since 2021. Meanwhile, complaints have been mounting within the U.S., especially from merchants, that card companies like Visa impose excessive fees.

Visa immediately pushed back. Julie Rotenberg, Visa's General Counsel, said in a statement on the day, "Anyone who has purchased something online or checked out at a store knows that companies offering new ways to pay for goods and services are constantly increasing," and added, "Today's lawsuit ignores the reality that Visa is just one of many competitors in the growing debit card market and that there are thriving market entrants." In the past, the Department of Justice also blocked Visa's acquisition of fintech startup Plaid. The $5.4 billion merger deal was later abandoned, and the lawsuit was dismissed.

Due to concerns over the antitrust lawsuit, Visa's stock closed at $272.78 per share on the New York Stock Exchange on the same day, down 5.49% from the previous session.