Consumer Watchdog Slams Shortsighted DOJ Visa Lawsuit

For Immediate Release

Contact: Kara Zupkus (224) 456-0257

WASHINGTON, D.C. – The Department of Justice (DOJ) recently announced a lawsuit against Visa for allegedly monopolizing the debit card market in the U.S. This is a shortsighted lawsuit that threatens the market and ignores the role government has played in creating whatever consolidation exists.

In response, Dan Savickas, Vice President of Policy and Government Affairs of the Taxpayers Protection Alliance, offered the following comment:

“Through a last-minute amendment from Sen. Dick Durbin (D-Ill.) to the Dodd-Frank financial reform of 2010, Congress capped fees associated with debit card processing. This, like most government rate controls, ensured only a handful of companies could reasonably comply and survive. The debit card market has been trying to catch up ever since.

“The consolidation customers presently experience with debit cards is precisely because of government intervention, not the lack thereof. In fact, earlier this year, Capital One and Discover announced a planned merger, which would potentially create another competitor to Visa. However, DOJ instantly criticized the move, which has caused skepticism about its ability to proceed.

“If government bureaucrats (like those at the DOJ) would take their thumbs off the scales and get out of the way, the U.S. could have the sort of parity they claim they desire. The free market works best when it does so unencumbered.”

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 Taxpayers Protection Alliance (TPA) is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis and dissemination of information on the government’s effects on the economy.