The U.S. Department of Justice (DOJ) is seeking to file a lawsuit against Visa, the world's largest payment network operator, for allegedly monopolizing the U.S. debit card market to gain an unfair advantage over rival payment processors.
DOJ's antitrust division is legally challenging Visa for allegedly exploiting its market dominance to stifle competition, Bloomberg reports.
The move is the culmination of the agency's multi-year investigation into Visa's business practices. The first probe was initiated in 2021 for the said concerns. Back then, the e-payment leader defended itself, saying its business ethics aligned with applicable laws, Reuters reported.
The probe holds Visa's payment processing technology under scanner. The lawsuit brought up allegations that the technology, which connects a bank to a merchant whenever a purchase is made, penalizes its customers when switching to rival payment processors, New York Times reported, citing anonymous sources.
The department may file the suit as early as Tuesday, the report said.
This isn't the DOJ's first showdown with Visa. In 2020, the DOJ filed a lawsuit to block Visa's proposed $5.3 billion acquisition of Plaid, a financial technology firm, citing concerns that the deal would eliminate Plaid as a competitor. The DOJ saw this as Visa's attempt to squash a market rival to maintain a monopoly. In 2021, the firms abandoned the merger.
The DOJ's moves are part of a broader scheme of things under which the Biden management is planning to crack down on corporate middlemen who unnecessarily drive-up fees. The DOJ so far has sued Live Nation Entertainment, the parent company of Ticketmaster, and RealPage, a real estate technology company as part of this scheme.
The DOJ and Federal Trade Commission have also filed lawsuits against Google, Apple, Amazon, and Meta. This is in line with the executive order issued by President Biden in 2021, which addresses market domination, encourages competition, and ensures fair pricing for the benefit of customers and spurs innovation.
Additionally, the Justice Department has been successful in stopping business mergers such as JetBlue Airways' proposed acquisition of Spirit Airlines and Penguin Random House's acquisition of Simon & Schuster.
