The DOJ lawsuit is untenable, and it illustrates a continuing economic policy agenda that should outrage American consumers who will be hardest hit even if the effort fails as a matter of law after needless waste of time, legal costs and judicial resources.

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After nearly four years in the White House, two central pillars in the emerging Biden/Harris administration legacy have been its inexplicable economic mismanagement and its flagrant administrative state overreach.  

In the case of economic mismanagement, the administration’s policies have resulted in deepening hardship for American consumers – particularly working-class consumers.  And with regard to its administrative excesses, the administration’s repeated extralegal behavior necessitated repeated rebukes from the nation’s judicial branch.  

The two habitual behaviors intertwined in recent days with the Biden/Harris Department of Justice (DOJ) announcing a new baseless lawsuit against Visa, which so many Americans voluntarily choose and on which so many of them depend.  

According to the DOJ, Visa somehow constitutes a “monopoly” in the debit card market.  Preposterously, in an ever-evolving consumer payment marketplace with constant new entrants, it claims that Visa has used its influence to prevent new alternatives from entering the market.  

The DOJ lawsuit is untenable, and it illustrates a continuing economic policy agenda that should outrage American consumers who will be hardest hit even if the effort fails as a matter of law after needless waste of time, legal costs and judicial resources.  

As an initial matter, it defies credulity to contend that in a market as competitive and evolving as the payments sector, Visa could exert monopolistic power.  That market not only includes such well-known counterparts as MasterCard, American Express, Discover Card, but also emerging digital payment platforms like PayPal, Apple Pay, Google Pay and even cryptocurrencies.  Indeed, Visa has worked alongside those enterprises as they joined the marketplace.  

Within the credit card market itself, established competitors like MasterCard maintain a significant share of business, which means that Visa cannot operate in some sort of atmosphere free of competitive pressures that allow it to become complacent.  

Further, many consumers choose to carry multiple credit cards from varying providers, making payment decisions based on factors like rewards programs, interest rates and merchant acceptance preferences.  Accordingly, even Visa members themselves aren’t somehow locked into it exclusively.  

Moreover, whatever Visa’s market share within the credit card sector, that sector is only one part of the overall payment ecosystem.  For instance, debit cards, cash, personal checks and varying digital payment methods like peer-to-peer apps all compete with credit cards for consumer spending options.  

As referenced above, it’s also important to note that merchants possess a choice in which cards to accept.  While Visa obviously remains a popular preference, it possesses no lock.  Merchants can opt in favor of aforementioned competitors like MasterCard or American Express, but they can also prefer various other payment platforms and payment systems employing digital wallets or other technologies that bypass traditional card networks.  Those merchants can also encourage customers to use emerging payment methods by offering discounts for cash payment, digital wallets or specific competing cards.  

In fact, federal law requires merchants to maintain the ability to route customer purchases via at least two unaffiliated networks.  That competitive merchant market choice ensures that Visa must continue to innovate and improve to maintain merchant loyalty as payment options evolve.  Consequently, Visa couldn’t corner merchants into using only its network even if it wanted to.  

Another important marketplace reality rendering the DOJ’s monopoly allegation preposterous is the expansive legal and regulatory framework that governs payment processing and financial services.  Along with other market competitors, Visa remains subject to extensive regulation from a wide variety of agencies, including the Federal Reserve, the Office of the Comptroller of the Currency and the infamous Consumer Financial Protection Bureau (CFPB).  With that multilayered and overlapping array of bureaucratic overlords, the possibility that Visa might have somehow slipped through the cracks and descended into unfair business practices or anti-competitive behavior over the years is virtually nonexistent.  

The more obvious reality is that this is another example of one of those overactive federal bureaucracies playing the role of hammer seeking out nails.  

The fact that the same DOJ leveled antitrust charges against Visa during its proposed acquisition of fintech firm Plaid in recent years only further confirms reality.  

Simply put, Visa is an American success story and world leader for good reason.  Namely, it meets customer demand due to its value and innovation over the decades.  

Perhaps unsurprisingly, that made it a likely latest victim of the Biden/Harris administration’s overactive hunt for targets in the American economy.  Unfortunately, American consumers who prefer Visa stand to suffer the longer this pointless lawsuit draws out.