NEW YORK — The United States Justice Department has launched an antitrust case against Visa, claiming that the financial services behemoth uses its size and dominance to hinder competition in the debit card market, costing consumers and companies billions of dollars.

According to the complaint filed on Tuesday, San Francisco-based Visa penalizes retailers and banks that do not use Visa’s own payment processing system to execute debit transactions, despite the availability of alternatives. Visa earns an additional fee for each transaction processed through its network.

According to the DOJ’s complaint, Visa’s debit network processes 60% of all transactions in the United States, allowing the company to earn more than $7 billion in fees each year.

“We allege that Visa has unlawfully amassed the power to extract fees far exceeding what it could charge in a competitive market,” said Attorney General Merrick B. Garland in a statement. “Merchants and banks pass on the expenses to customers, either by raising prices or lowering quality or service. As a result, Visa’s illegal behaviour affects not just one thing, but almost everything.”

Department Of Justice Sues Visa, Alleges The Card Issuer Monopolizes Debit Card Markets

According to Julie Rottenberg, Visa’s general counsel, the case fails to consider the “ever-expanding universe of companies offering new ways to pay for goods and services.”

“Today’s lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving,” Rottenberg told reporters. She went on to say that the case is “meritless” and that the corporation will defend itself “vigorously.”

The Biden administration has aggressively pursued U.S. corporations claiming to function as intermediaries, such as Ticketmaster parent Live Nation and real estate software company RealPage, accusing them of burdening Americans with absurd fees and anti-competitive behavior. The administration has also charged tech behemoths like Apple and Google with monopolistic behavior.

“In some of the Justice Department’s antitrust enforcement actions, the harm caused by the alleged illegal conduct is more visible: higher prices for air travel, concert tickets, and smartphones,” Garland stated during a news conference in Washington on Tuesday. “The harmful effects of Visa’s alleged anticompetitive conduct is less visible, but they are no less harmful.”

According to the DOJ case, filed in the United States District Court for the Southern District of New York, Visa uses the huge number of transactions on its network to impose volume commitments on merchants, their banks, and financial institutions that issue debit cards. This makes it difficult for merchants to employ alternatives to Visa’s payment processing technology, such as lower-cost or smaller payment processors, without facing what the DOJ described as “disloyalty penalties” from Visa.

The DOJ said that Visa also suppressed competition by paying to cooperate with potential competitors.

In 2020, the DOJ filed a lawsuit to prohibit the company’s $5.3 billion acquisition of financial technology startup Plaid, claiming it was a monopolistic takeover of a prospective competitor to Visa’s omnipresent payment network. That acquisition was later called off.

Visa previously revealed that the Justice Department was investigating the business in 2021, stating in a regulatory filing that it was participating in the DOJ probe into its debit operations.

Department Of Justice Sues Visa, Alleges The Card Issuer Monopolizes Debit Card Markets

Since the epidemic, more consumers worldwide have been purchasing online products and services, resulting in increased revenue for Visa in the form of fees. Even historically cash-heavy establishments such as pubs, barbershops, and coffee shops have begun to accept credit or debit cards as payment, typically through cellphones.

In a note to investors, KBW analyst Sanjay Sahrani estimated that U.S. debit revenue is likely to account for only approximately 10% of Visa revenue.

“Some subset of that may be lost if there is a financial impact,” he indicated. Visa said: “U.S. consumer payments business is the slowest growing piece of the aggregate business, and to the extent its contribution is affected, it is likely to have a very limited impact on revenue growth.”

He also stated that if the lawsuit is not settled and goes to trial, it may last years.

During the quarter ending June 30, Visa handled $3.325 trillion in transactions on its network, a 7.4% increase over the previous year. U.S. payments increased by 5.1%, outpacing U.S. GDP growth.

Visa stock lost $15.85, or 5.5%, to end at $272.94 on Tuesday.

SOURCE | AP

The Securities and Exchange Commission intends to seek sanctions against Elon Musk for failing to attend testimony in an inquiry into his acquisition of Twitter, now known as X, the agency said in a court filing Friday.

Earlier this year, a federal judge ordered Musk to testify as part of the SEC’s investigation into the billionaire’s $44 billion acquisition. The government is looking into whether Musk followed the rules when declaring his purchases of Twitter stock and whether his claims about the transaction were misleading.

Elon Musk Didn’t Show Up For Testimony In A Probe Over His $44 Billion Twitter Takeover. Now The SEC Wants Sanctions

After some initial scheduling back and forth, the parties decided that Musk would testify on September 10, and SEC lawyers flew to Los Angeles to conduct Musk’s hearing, according to Friday’s court filing. However, three hours before Musk’s testimony was scheduled to begin, his lawyer informed the SEC that his client, who also runs SpaceX, needed to urgently travel to the East Coast for the launch of the Polaris Dawn mission and would be unable to attend or reschedule to the following day, according to the filing.

The two sides subsequently battled to locate a time to reschedule the testimony before agreeing on an early October date, according to the petition.

The SEC claims that Musk breached a court order requiring him to “seek ‘written consent of the SEC or order of the Court’ to modify the date of his testimony,” which he did not do before failing to appear on September 10.

Elon Musk Didn’t Show Up For Testimony In A Probe Over His $44 Billion Twitter Takeover. Now The SEC Wants Sanctions

“Musk’s excuse itself smacks of gamesmanship,” the SEC wrote in its filing. “SpaceX had already announced a Tuesday morning launch two days beforehand… Musk, the company’s Chief Technical Officer, must have known by then that SpaceX planned to launch on the morning of his SEC appearance.

It proceeded with this: “Despite this advance knowledge, Musk did not notify the SEC of his intent to attend the launch until three hours before his testimony was to begin, and after the SEC spent thousands of dollars to fly three attorneys to Los Angeles.”

Musk has already attempted to deflect calls to testify again in the investigation, claiming that he has already done so twice.

The SEC requested that the court impose “meaningful conditional relief” if Musk does not arrive for the revised October testimony date. The SEC also stated that it expects to file a sanctions motion against Musk to recoup its travel expenses for the canceled testimony, as well as additional relief.

Elon Musk Didn’t Show Up For Testimony In A Probe Over His $44 Billion Twitter Takeover. Now The SEC Wants Sanctions

Musk’s lawyers responded that the Court’s intervention was unnecessary, as the parties had already agreed on a fresh testimony date… This Court has already ordered Mr. Musk to attend ‘absent an emergency that (Mr. Musk) did not create and could not avoid.'”

The complaint is the latest escalation in Musk’s long-running feud with the SEC, which began in 2018 when the agency sued him for falsely claiming that he had “funding secured” to take Tesla private.

SOURCE | CNN

NEW YORK — Less than two weeks before his 100th birthday, former President Jimmy Carter will receive a lifetime achievement award from the Dayton Literary Peace Prize Foundation, which has waived its usual requirement that the honor collects the honour in person.

Jimmy received this year’s Ambassador Richard C. Holbrooke Distinguished Achievement Award, named after the late diplomat, according to the Ohio-based organization on Thursday. Carter was given the Nobel Peace Prize in 2002 for his human rights advocacy and for brokering accords between Egypt and Israel, such as the Camp David Accord.

Carter, who turns 100 on October 1, is receiving hospice care in Plains, Georgia. His grandson, Jason Carter, will accept the prize on his behalf at a November ceremony honoring the former president’s peace efforts and authorship of more than 30 books, which the foundation describes as “the power of the written word to foster peace, social justice, and global understanding.”

Jimmy Carter Receives Holbrooke Award From Dayton Literary Peace Prize Foundation

“For the past 17 years, one of the standing requirements to receive the Ambassador Richard C. Holbrooke Distinguished Achievement Award was a guarantee that the recipient would appear in person in Dayton, Ohio for an on-stage interview and an awards ceremony,” Nicholas A. Raines, executive director of the Dayton foundation, said in a statement. “This year we have decided to waive that requirement and present the award in absentia, to President Jimmy Carter.”

According to Jason Carter, his grandfather’s “most enduring interests have been a devotion to literature and a near-constant pursuit of a peaceful resolution to conflict.”

“It is gratifying to have the Dayton Literary Peace Prize Foundation choose to honour my grandfather with the Ambassador Richard C. Holbrooke Distinguished Achievement Award for a lifetime of work melding two of his loves — literature and peace,” Mr. Carter said.

Jimmy Carter Receives Holbrooke Award From Dayton Literary Peace Prize Foundation

On Thursday, the Foundation also announced that Paul Lynch’s “Prophet Song” received the Dayton Literary Peace Prize for Fiction, while Victor Luckerson’s “Built from the Fire” won for Nonfiction.

Lynch and Luckerson will each get $10,000. Fiction runner-up Anne Berest of “The Postcard” and nonfiction finalist Tania Branigan of “Red Memory” will each get $5,000.

SOURCE | AP