Visa Stock Slips as DOJ Suit Says Its Contracts ‘Stifle Innovation’

Visa (V) shares fell Tuesday as the U.S. Department of Justice (DOJ) sued the payment processing giant over allegedly monopolistic behavior to protect its dominant position in the debit card market.

“Visa has been the largest, most powerful debit network for over a decade,” the DOJ wrote in the lawsuit, which was filed in Manhattan federal court. It alleged that the company’s contracts with merchants “unlawfully inhibit competition and stifle innovation.”

An antitrust lawsuit led Visa and competing payment processor Plaid to abandon merger talks in January 2021. The DOJ said at the time that the planned $5.3 billion merger was an example of Visa’s monopolistic behavior, as it looked to acquire a potential rival before it was large enough to effectively challenge it.

“We are proud of the payments network we have built, the innovation we advance, and the economic opportunity we enable,” said Visa General Counsel Julie Rottenberg in an email. “This lawsuit is meritless, and we will defend ourselves vigorously.”

Bloomberg and The New York Times earlier reported a DOJ filing was imminent, causing Visa stock to trade lower throughout the session Tuesday. The shares closed down more than 5%.

Suit Is Latest Antitrust Move From DOJ, FTC

The lawsuit is the latest move from the DOJ and Federal Trade Commission (FTC) in recent years to use antitrust laws to block mergers and challenge dominant companies like Ticketmaster parent Live Nation (LYV), Meta Platforms (META), Apple (AAPL), and Alphabet’s Google (GOOGL).

Visa shares fell more than 5% to $273.76 soon before the closing bell Tuesday. They are up 5% this year.

UPDATE: This story has been updated to note the filing of the lawsuit, add a statement from Visa, and update the share price.