The U.S. Justice Department reportedly plans to file an antitrust suit against Visa as early as Tuesday (Sept. 24).
The agency plans to allege that the company illegally monopolized the U.S. debit card market through a range of anticompetitive acts, Bloomberg reported Monday (Sept. 23), citing unnamed sources.
The Justice Department could not be reached by PYMNTS for comment outside of normal business hours.
In a statement provided to PYMNTS, Visa General Counsel Julie Rottenberg said the lawsuit is meritless and the company will defend itself vigorously.
“Anyone who has bought something online, or checked out at a store, knows there is an ever-expanding universe of companies offering new ways to pay for goods and services,” Rottenberg said. “Today’s lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving.”
“When businesses and consumers choose Visa, it is because of our secure and reliable network, world-class fraud protection, and the value we provide. We are proud of the payments network we have built, the innovation we advance, and the economic opportunity we enable. This lawsuit is meritless, and we will defend ourselves vigorously.”
The Justice Department’s case will allege that Visa has protected its dominance in the debit card market by making exclusive agreements and by preventing technology companies from entering the market, according to the Bloomberg report.
The agency has been investigating Visa’s business practices since 2021, when it looked into the company’s failed effort to acquire Plaid and focused on Visa’s pricing structure in “tokenization” technology, the report said.
Visa launched its proposed acquisition of Plaid in January 2020 but opted out of the deal in January 2021 after Justice filed an antitrust lawsuit challenging the plan.
“We are confident we would have prevailed in court as Plaid’s capabilities are complementary to Visa’s, not competitive,” Al Kelly, who was Visa’s CEO at the time, said in a January 2021 statement. “… However, it has been a full year since we first announced our intent to acquire Plaid, and protracted and complex litigation will likely take substantial time to resolve.”
The Justice Department said at the time that Visa’s decision to terminate the deal preserved competition, adding that Plaid was developing a payments platform that would challenge “Visa’s monopoly” and that the transaction would have enabled Visa to eliminate this competitive threat to its online debit business.
“Now that Visa has abandoned its anticompetitive merger, Plaid and other future FinTech innovators are free to develop potential alternatives to Visa’s online debit services,” Makan Delrahim, who was assistant attorney general of the Justice Department’s antitrust division at the time, said in a January 2021 press release.
In August 2023, it was reported that Visa was the target of a Justice Department investigation into its tokenization practices. The probe focused on Visa’s policy of charging more to merchants who don’t use its tokenization system, Bloomberg reported.
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