Visa: further decline after DoJ antitrust complaint

(CercleFinance.com) - Visa shares continued to decline on Wall Street on Wednesday morning, following a loss of more than 5% in the wake of the Department of Justice's decision to take legal action against the payment card issuer, which it accuses of anti-competitive practices.


A little over an hour after the opening, the stock was down 0.9%, having fallen 5.4% the previous day.

The DoJ believes that the group is illegally maintaining a monopolistic position in the debit card market in order to thwart the growth of its existing competitors and prevent new entrants from developing innovative products and services.

According to the US government, over 60% of all transactions in the USA are carried out via the Visa network, with Visa earning some seven billion dollars a year in commissions on these transactions.

We believe that Visa has illegally arrogated to itself the power to charge fees that far exceed what the company could charge in a competitive market," said Attorney General Merrick Garland in a statement.

The anti-competitive behavior of companies like Visa harms the American people and the economy as a whole," added Benjamin Mizer, Deputy Attorney General.

Visa joins a list of major technology companies being prosecuted by U.S. authorities, which includes Apple, Alphabet (Google) and Amazon.

For analysts at UBS, yesterday's fall in the share price incorporates the scenario of severe losses of market share or the appearance of strong pressure on the group's tariffs.

For the research firm, however, 'it is unlikely that a possible injunction will not impact Visa's results for several years, given the scope of the case, which is likely to involve motion, discovery and even appeal procedures'.

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