The competition authorities are targeting Visa

The Biden administration is gearing up for its next major battle against monopolies, this time focusing on Visa, a cornerstone of the global payment system. According to reports, the Department of Justice plans to sue the company as early as next Tuesday. Visa is accused of engaging in illegal monopolistic practices and other unlawful behaviors, as reported by Lauren Hirsch of DealBook and David McCabe of The Times. This lawsuit continues the government's efforts to crack down on intermediary companies in the competitive landscape. The core of the lawsuit centers around payment processing technology, which connects a bank with a merchant during every purchase. The Department of Justice argues that Visa penalizes customers, including merchants, who attempt to use competing payment processing services. According to prosecutors, Visa is also accused of coercing financial technology companies into working with it by threatening sanctions against those that do not comply, thereby excluding potential new competitors. The Wall Street Journal previously reported that the Department of Justice was investigating incentives Visa had given to companies like Square, Stripe, and PayPal. Visa has disclosed that it has been under investigation by the Department of Justice for years. Federal authorities have conducted hundreds of interviews with various entities including retailers, supermarkets, and banks to understand Visa's agreements with financial technology companies. Investigators analyzed the negotiations, contracts, and the structure of the sanction mechanisms. The case originated in 2020 when the Department of Justice attempted to block a $5.3 billion deal between Visa and financial technology company Plaid. At that time, the agency argued that the deal was aimed at eliminating a young competitor. The Department of Justice emphasized that Visa had dominated the debit market for years and protected its monopoly with exclusionary tactics. (The companies later abandoned the transaction.)