The article reports on a lawsuit filed by the US Department of Justice against Visa, alleging that the company has been engaging in anticompetitive practices to maintain its dominance in the debit card market. Here are some key points from the article:
- Cliff Pricing: The Justice Department alleges that Visa used "cliff pricing," charging merchants significant fees on transactions unless they routed the vast majority of them to Visa, at which point they would get a discount.
- Exclusive Deals: Visa reached exclusive deals with companies like Apple Pay and Block (formerly Square) that bar these companies from developing technology that rivals Visa’s debit capabilities.
- Long-term Exclusivity: The Justice Department alleges that Visa used long-term exclusive contracts to lock venues into using its technology, stifling innovation in the market.
- Payoffs: The article also mentions that Visa pays Apple hundreds of millions of dollars each year under a deal that bars Apple from developing technology that would rival Visa’s debit capabilities.
The case is seen as part of a broader trend of antitrust enforcers cracking down on dominant companies that use restrictive contracts to stifle innovation.
