The company was accused of unlawful monopoly behavior that was designed to crush competition in the debit network market. This includes attempts to hinder archrivals from flourishing such as PayPal and Square.
The case comes after several years of long investigations after bombshell disclosures were made in 2021.
A new statement was rolled out on this front by the DOJ who has the company tried long and hard to amass a huge amount of power to get money from clients that was more than necessary in a competitive market.
Hence, it’s not just the company that raised pricing but also forced merchants and banks to do the same while compromising on quality. It’s certainly a big deal because the company makes billions every year in the form of payment processing fees. And this does not include the array of other services rendered.
On average, the fees for processing payments go up to $7B and 60% of these debit transactions in America alone run on the firm’s network. Hence, the dominance taking place must be stopped to enable other competitors to flourish.
A lot of the reasons outlined for Visa’s behavior include an array of exclusion agreements that are put on banks and companies. Similarly, it has made attempts to remove competition, including those working on smaller scales and those who are startups in the fintech sector.
So many of the company’s executives feel threatened by iPhone maker Apple which it claimed is their biggest competition and threat in the market.
More details revealed how the company entered into paid agreements with competitors as a part of its efforts to hinder competition from newbies in the payment industry. As a result of these actions, it has become a monopoly.
This is why regulators have had eyes on the company for quite some time now. As per the DOJ, another similar legal case was generated in 2020 that prevented its acquisition of fintech company Plaid. The complaint argued that such behavior would wipe out a leading challenger of Visa that could hinder its monopoly practices.
As a result, both Visa and Plaid opted to scrap the plans for attempts to merge together, thanks to this lawsuit.
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by Dr. Hura Anwar via Digital Information World
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