Washington WASHINGTON: Visa shares fell on Tuesday after the U.S. Justice Department filed a lawsuit accusing it of violating antitrust law by stifling competition by charging higher fees to merchants and slashing payments to potential rivals. Visa, one of the world's largest payment networks, processes more than 60% of debit transactions in the U.S., collecting $7 billion each year in fees when transactions take place on its network, the Justice Department said.
Prosecutors allege the company protects that dominance through agreements with card issuers, merchants and competitors. Visa shares closed down about 5.5% on Tuesday. Visa General Counsel Julie Rotenberg said competition in the debit market is increasing, and the claims are unfounded and the company will vigorously contest them. “When businesses and consumers choose Visa, it's because of our secure and trusted network, world-class fraud protection and the value we deliver,” she said.
The effort to tackle the fees, sometimes known as swipe fees or interchange fees, is part of the Biden administration's efforts to combat rising consumer prices, a key issue in the Nov. 5 presidential election between Democrat Kamala Harris and Republican Donald Trump. “Visa's unlawful conduct affects not just the price of one thing, but the price of nearly everything,” Attorney General Merrick Garland said in a statement, adding that merchants and banks pass on the costs of payment networks to consumers. A senior Justice Department official said Visa's alleged anti-competitive conduct began around 2012, when competing companies entered the payments space after reforms that required card issuers to accommodate unaffiliated networks.
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