Shares of Visa Inc. plummeted approximately 5.5% on Tuesday following the U.S. Department of Justice’s (DOJ) announcement of a lawsuit against the company, alleging it has violated antitrust laws by stifling competition in the debit card market. The lawsuit claims that Visa employs aggressive tactics, including imposing high fees on merchants and attempting to buy off potential competitors, to maintain its dominance.
Visa, one of the largest payment networks globally, processes over 60% of debit transactions in the United States, generating approximately $7 billion annually from fees associated with transactions routed through its network, according to the DOJ. Prosecutors contend that Visa safeguards its market position through exclusive agreements with card issuers, merchants, and competing firms.
In response to the lawsuit, Julie Rottenberg, Visa’s general counsel, asserted that competition is thriving within the debit market. She dismissed the allegations as meritless, stating that Visa will vigorously contest the claims. “When businesses and consumers choose Visa, it is because of our secure and reliable network, world-class fraud protection, and the value we provide,” she remarked.
This legal action is part of the Biden administration’s broader initiative to address rising consumer prices, a key concern as the nation approaches the presidential election on November 5, where Democratic candidate Kamala Harris will face off against Republican candidate Donald Trump.
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