Biden DOJ’s antitrust lawsuit against Visa unfounded

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The Biden Justice Department today announced an antitrust lawsuit against Visa, alleging the company illegally monopolized the debit card market by enticing merchants away from competitors using volume discounts. Competitive Enterprise Institute antitrust and financial policy experts say antitrust charges are unfounded and against consumer interests.

Jessica Melugin, director of CEI's Center for Technology & Innovation:

"Suing Visa over concerns that the debit card market is insufficiently competitive seems a strange use of limited resources when multiple regulators, including the DOJ, are simultaneously scrutinizing the merger of CapitalOne and Discover. That union would infuse the sector with a new competitive threat, to the benefit of consumers. Going after common business practices while preventing viable competitors from materializing would be government substituting its own preferences for vastly superior market forces."

John Berlau, CEI director of finance policy:

"Since its creation as a bank-owned cooperative more than 50 years ago, the Visa payment card network has enabled banks and credit unions of all sizes to issue credit and debit cards that consumers can get from their local financial institution and safely and securely use anywhere in the world. Today's action absurdly asserting that this arrangement constitutes a monopoly will harm the access of consumers and small banks and credit unions to this beneficial network.

"The debit card market and the payment market have plenty of competition. Thousands of banks and credit unions issued debit cards on their own terms. The Visa debit card network also has plenty of competition from payment services, such as Venmo, Zelle, cryptocurrency, and buy-now-pay later firms that merchants and consumers can utilize.

"The DOJ should immediately drop this lawsuit that will greatly harm payment innovation and consumer welfare."

Related analysis on the CapitalOne/Discover merger