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The
move, made in a comment letter filed to the Federal Reserve by
the DOJ's Antitrust Division, underlines the Biden's
administrations renewed efforts to bolster the government's
antitrust efforts.
"We commend the Board for its efforts to promote competition in
this important part of the debit card industry," Richard Powers,
acting assistant attorney general for the antitrust division,
said in a statement. "There is limited competition to process
online and other card-not-present debit transactions — which in
2019 accounted for over $1 trillion in transaction value."
In July, President Joe Biden signed an executive order directing
government agencies to crack down on anticompetitive behavior
across a range of industries, including banking.
The rise of online commerce spurred the Fed to revisit its 2011
"interchange" rule in May, reproposing a portion to ensure debit
card providers offer multiple networks to merchants for
transactions where the card is not physically present. The
Justice Department says that move could ultimately lower costs
for consumers.
Reuters previously reported the Justice Department had been
investigating Visa Inc for anticompetitive practices in the
debit-card market, including directing merchants to pricier
networks to route transactions.
Rules around so-called "swipe fees" have been a fierce lobbying
battle ground for banks and major retailers ever since the 2010
Dodd-Frank financial reform law directed the Fed to cap how much
banks could charge to process a transaction.
When the Fed announced it was revisiting the rule, several large
bank lobbying groups said in a joint statement the policy has
been "flawed from the beginning" and trying to revisit it "risks
causing even further consumer harm."
(Reporting by Pete Schroeder; Editing by David Gregorio)
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