According to reports, the US Department of Justice is preparing to file an antitrust lawsuit against payment giant Visa, accusing the company of engaging in anti competitive behavior.
According to an insider, federal prosecutors will file a lawsuit as early as this Tuesday (September 24th). Previously, the US Department of Justice had conducted a years long review of Visa's business practices.
After the announcement, Visa's stock price fell nearly 2% in after hours trading. So far this year, the company's cumulative increase has reached 11.50%.
Visa disclosed in a regulatory filing in 2021 that the antitrust department of the US Department of Justice required it to provide information on possible violations of antitrust laws, with a focus on Visa's debit card business in the US and competition with other networks and payment methods. At that time, Visa's response was that its debit business in the United States complies with applicable laws.
Last year, the antitrust department of the US Department of Justice issued an investigation request to Visa, requesting it to provide documents and information regarding its debit card business in the US and competition with other payment networks.
Similarly, antitrust agencies have also examined Visa's competitor Mastercard. Last year, Mastercard reached an agreement with the Federal Trade Commission to settle allegations that the company forced users to make payments directly through its payment network.
Earlier this year, Visa also reached a settlement agreement with Mastercard worth approximately $30 billion to limit the collection of credit and debit card fees from merchants. Some of the saved fees may be transferred to consumers through lower prices, which merchants say will save them $30 billion over five years. However, the agreement was later rejected by a federal judge.
Currently, radical antitrust officials in the Biden administration are implementing stricter antitrust policies against large corporations in an attempt to correct decades of lax enforcement.
Under the leadership of Assistant Secretary of Justice Jonathan Kanter, the antitrust division of the US Department of Justice has been investigating major cases in an attempt to curb powerful corporations, including large tech companies, such as its heated standoff with Google over its monopoly on digital advertising.