Webp 0cqnuqbohs898f84h470veyg6gie
Robert D. Atkinson President at Information Technology and Innovation Foundation | Official website

ITIF responds to DOJ lawsuit against Visa

The U.S. Department of Justice (DOJ) has filed a lawsuit against Visa, alleging anticompetitive behavior in two debit network services markets. The Information Technology and Innovation Foundation (ITIF), a prominent think tank for science and technology policy, responded with a statement from Joseph V. Coniglio, director of antitrust and innovation at ITIF.

"The payments industry is no stranger to antitrust scrutiny," Coniglio stated. He referenced past cases involving Visa, including issues with "exclusionary rules" that prevented member banks from issuing Amex or Discover cards and the proposed merger with Plaid.

Coniglio argued that Visa does not hold monopoly power and competes actively with Mastercard and other companies in the debit network services market. He noted that the DOJ's claimed market shares of 60% and 65% are below the 70% threshold typically applied by courts in the Second Circuit.

"The DOJ’s attempt to get around this by bringing an attempted monopolization claim, which only requires a dangerous probability of monopoly power, is again not only belied by Mastercard’s longstanding competitive position but vitiated by the difficulty of showing that Visa acted with any anticompetitive animus," Coniglio said.

He also addressed the DOJ's allegations regarding Visa's contracts with merchants, acquirers, and issuers. According to Coniglio, these contracts appear to be volume discounts rather than anticompetitive practices. He questioned how Visa could be systematically pricing below its costs given its high margins and low incremental costs.

Finally, Coniglio discussed the DOJ's characterization of partnership agreements between Visa and digital wallets like Apple, PayPal, and Square as part of a collusive scheme to stifle competition. He suggested that Visa could present strong pro-consumer justifications for these partnerships.

Coniglio concluded by criticizing the DOJ's approach: "With this lawsuit, the DOJ continues its crusade against corporate America at a time when U.S. competitiveness against China could not be more paramount."

For further information, contact Sydney Mack at [email protected].