Agencies
Visa shares suffered on Tuesday after the U.S. Department of Justice (DOJ) filed a lawsuit accusing it of violating antitrust law by suppressing competition by threatening merchants with high fees and paying off potential rivals.
Visa, one of the world’s largest payment networks, processes more than 60% of debit transactions in the U.S., bringing it $7 billion each year in fees collected when transactions are routed over its network, the Justice Department said. The company protects that dominance through agreements with card issuers, merchants, and competitors, prosecutors allege.
Visa shares closed down around 5.5% on Tuesday.Julie Rottenberg, Visa’s general counsel, said competition is thriving in the debit market, and that the claims are meritless and the company will contest them vigorously."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 said.
The bid 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 major issue in the Nov. 5 presidential election between Democrat Kamala Harris and Republican Donald Trump.