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The Department of Justice has sued Visa for antitrust law violations on debit cards.
Under both Republican and Democratic administrations, DOJ has filed suit against Visa under the antitrust laws.
And, just last year, Mastercard agreed to a consent order to avoid similar claims from the Federal Trade Commission.
Why is all this only on debit cards when credit card fees are much, much higher?
Debit cards have a competitive market. While Visa has abused the antitrust laws to undermine that competition, the foundation exists and works (when Visa doesn’t stop it).
On credit cards, however, there is no competitive market at all.
Some think it’s more complicated to apply normal laws like the antitrust laws to a credit card market where Visa and Mastercard simply prohibit competition altogether.
That’s one reason we desperately need competition on credit cards. A simple baseline ensuring there is a competitive market would allow enforcement of laws we all assume are being enforced all the time.
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