As was previously reported, the US Department of Justice (DOJ) has filed a lawsuit against Visa (NYSE:V) claiming uncompetitive practices that stifle innovation while keeping costs high for consumers.
A statement by the Competitive Enterprise Institute (CEI) posted this week counters this argument, claiming the DOJ’s pursuit of Visa “unfounded.”
John Berlau, CEI director of finance policy, explained that since Visa’s founding as a bank-owned cooperative over 50 years ago, the network has enabled banks of all sizes to issue credit and debit cards that consumers may use safely anywhere around the world.
“Today’s action absurdly asserts that this arrangement constitutes a monopoly and 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.”
CEI’s Director of the Center for Technology & Innovation, Jessica Melugin, said the DOJ’s claim filed against Visa is a strange use of limited resources.
“Going after common business practices while preventing viable competitors from materializing would be government substituting its own preferences for vastly superior market forces.”
