09.24.24

Durbin, Marshall Statement On DOJ Lawsuit Alleging Visa Debit Card Practices Violate Federal Antitrust Law

WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, and U.S. Senator Roger Marshall, M.D. (R-KS), lead sponsors of the Credit Card Competition Act, today released the following statement after the U.S. Department of Justice (DOJ) filed a lawsuit against Visa alleging that the company illegally maintains a monopoly over debit network markets through anticompetitive practices that violate federal antitrust law:

“According to DOJ’s lawsuit, Visa made exclusive agreements to hinder the expansion of competing networks and blocked efforts by technology companies to enter the market.  At a time when hard-working Americans and small business owners are struggling with higher costs of everyday essentials, Visa should not be gaming the system to pad their own pockets."

“Visa and its duopoly partner Mastercard similarly dominate the credit card market.  One way to bring competition to the market is to pass our bipartisan, bicameral legislation—the Credit Card Competition Act—which would enhance competition between credit card networks and ultimately lower costs for small businesses and consumers.  Our bill ensures that the Visa-Mastercard duopoly ends their price gouging tactics that disproportionately hurt American families and small businesses.”

It is estimated that businesses paid more than $100 billion in swipe fees on Visa and Mastercard branded cards in 2023 alone.  In fact, swipe fees can be small businesses’ second highest cost behind only the cost of labor.

The Credit Card Competition Act of 2023 would enhance competition and choice in the credit card network market which is currently dominated by the Visa-Mastercard duopoly.  Building off of debit card competition reforms enacted by Congress in 2010, the bill would direct the Federal Reserve to ensure that largest credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed.  The bill is estimated to save merchants and consumers $15 billion each year.

Visa and Mastercard wield enormous market power in credit cards; according to the Federal Reserve, they account for nearly 576 million cards, or about 83 percent of general-purpose credit cards.  Visa’s and Mastercard’s market power and network structure have enabled them to impose fees on U.S. merchants that are among the world’s highest.  These fees include interchange fees which Visa and Mastercard require merchants to pay to issuing banks, as well as network fees that Visa and Mastercard require merchants to pay directly to them.  Consumers ultimately pay for these fees in the price of the goods and services they buy.

  

-30-