Visa, one of the world’s largest payment networks, and one of two title sponsors of the RB F1 team is being sued by the United States Department of Justice.
Visa took up sponsorship of the Faenza-based squad at the start of the season, along with CashApp, to form the VCARB team, or RB as it is also referred to.
The luring of such a major household brand as Visa was seen as a major coup for the team and the sport.
Regarding the lawsuit, the DOJ alleges that Visa is a “monopolist in the debit transaction markets” and is in violation of Sections 1 and 2 of the 1890 Sherman Antitrust Act.
The Act, which members of the Senate and House of Representatives allege F1 is in breach of over its denial of Andretti’s entry bid, prohibits the “restraint of trade” between states or foreign nations.Â
In a statement outlining its case, Attorney General Merrick Garland claimed the DOJ feels that Visa, in order to “maintain its monopoly power” of “70% of all online debit transactions” in a market worth over $4 trillion, “deploys a web of unlawful, anticompetitive agreements to penalise merchants and banks for using competing payment networks.
“At the same time,” Garland continued, “it coerces would-be market entrants into unlawful agreements not to compete by threatening high fees if they do not cooperate and promising big payoffs if they do.
“The result is a debit market where Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market.”
The DOJ claims that Visa collects more than $7 billion in fees on transactions in the United States, “with a significant part of that sum resulting from Visa’s illegal conduct”.
Visa responds
In response, to the lawsuit, Visa claimed the DOJ “ignores the reality” of the debit space system.
“Anyone who has bought something online, or checked out at a store, knows there is an ever-expanding universe of companies offering new ways to pay for goods and services,” said Visa general counsel Julie Rottenberg.
“The lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving.
“We are proud of the payments network we have built, the innovation we advance, and the economic opportunity we enable.”