WORLD NEWS FLASH
UNITED STATES
The Justice Department filed a civil antitrust lawsuit Sept. 24 against Visa for monopolization and other unlawful conduct in debit network markets in violation of Sections 1 and 2 of the Sherman Act.
Filed in the U.S. District Court for the Southern District of New York, the complaint alleges that Visa illegally maintains a monopoly over debit network markets by using its dominance to thwart the growth of its existing competitors and prevent others from developing new and innovative alternatives.
According to the complaint, more than 60% of debit transactions in the United States run on Visa’s debit network, allowing it to charge over $7 billion in fees each year for processing those transactions. The complaint further alleges that Visa illegally maintains its monopoly power by insulating itself from competition. For example, Visa wields its dominance, enormous scale, and centrality to the debit ecosystem to impose a web of exclusionary agreements on merchants and banks.
These agreements penalize Visa’s customers who route transactions to a different debit network or alternative payment system. In so doing, the complaint alleges, Visa locks up debit volume, insulates itself from competition, and smothers smaller, lower-priced competitors. Visa also induces would-be competitors to become partners instead of entering the market as competitors by offering generous monetary incentives and threatening punitive additional fees. As the complaint alleges, Visa coopted the competition because it feared losing share, revenues, or being displaced by another debit network altogether.
“We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market,” said Attorney General Merrick B. Garland. “Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service. As a result, Visa’s unlawful conduct affects not just the price of one thing – but the price of nearly everything.”
Debit transactions are an important and popular part of the U.S. financial system. Millions of Americans prefer or must use debit for online and in-person purchases. Visa dominates debit network markets that facilitate these transactions, charging significant fees and stifling competition in the process. Visa’s systematic efforts to limit competition for debit transactions have resulted in billions of dollars in additional fees imposed on American consumers and businesses and slowed innovation in the debit payments ecosystem. Through this lawsuit, the Justice Department seeks to restore competition to this vital market on behalf of the American public.
“Anticompetitive conduct by corporations like Visa leaves the American people and our entire economy worse off,” said Principal Deputy Associate Attorney General Benjamin C. Mizer. “Today’s action against Visa reminds those who would stifle competition rather than competing on price or investing in innovation that the Justice Department will never hesitate to enforce the law on behalf of the American people.”
“Visa fears competition and innovation, and instead chooses unlawful cooperation and monopolization,” said Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “Visa abuses its power over its customers and buys off would-be rivals at the expense of American consumers, merchants, banks, and the competitive process itself. Today’s lawsuit holds Visa accountable for its conduct in a market that forms the backbone of American commerce.”
Visa maintains enormous scale on both sides of the debit market – with merchants and their banks and with consumers and their banks – and the complaint alleges that Visa’s exclusionary practices extend, deepen, and protect what it refers to as an “enormous moat” around its business. When faced with the possibility that smaller debit networks or new technology entrants would threaten that position, Visa engaged in a deliberate and reinforcing course of conduct to cut off competition and prevent rivals from gaining the scale, share, and data necessary to compete for customers’ business:
- Smaller Debit Networks: Visa uses leverage based on the large number of transactions that must run over Visa’s payment rails to impose expansive volume commitments on merchants and their banks, as well as on financial institutions that issue debit cards. These agreements are priced so that, unless all or nearly all debit volume runs over Visa’s payment rails, large disloyalty penalties can be imposed on all Visa transactions. Merchants cannot afford to use Visa’s smaller competitors for transactions where options do exist, even when those competitors offer lower per-transaction prices.
- Tech Entrants: As Visa’s internal documents make clear, Visa feared that some technology companies and fintech startups with “network ambitions” would cut Visa out as the middleman between merchants, consumers, and their banks by offering a better or cheaper payment product. Visa aimed to stop that development by entering into agreements to pay potential competitors to partner instead of innovating. As Visa’s then-CFO put it: “Everybody is a friend and partner. Nobody is a competitor.”
In 2020, the Justice Department filed a civil antitrust lawsuit to stop Visa from acquiring Plaid, a technology company that powers fintech apps developing disruptive options for online debit payments. The companies abandoned their planned $5.3 billion merger.
Visa Inc. is a Delaware corporation headquartered in San Francisco. Visa has a global operating income of $18.8 billion and an operating margin of 64% in 2022. North America is among Visa’s most profitable regions with 2022 operating margins of 83%. Visa charges roughly $8 billion in network fees on U.S. debit volume annually. Globally, Visa processes $12.3 trillion in total payment volume.
MASS SHOOTING UPDATE
Information recent as of 9-24-2024 at 12 p.m.
2024 Mass Shooting Stats: (Source: Mass Shooting Tracker – https://www.massshootingtracker.site/data/?year=2024)
- Total Mass Shootings: 467
- Total Dead: 561
- Total Wounded: 1928
- Shootings Per Day: 1.74
- Days Reached in Year 2024 as of September 24: 268
MIDDLE EAST
ISRAEL INCREASING AGGRESSION
Tensions continued to ratchet up in the Middle East on Sept. 23 with reports of scores of retaliatory Israeli strikes on Hezbollah targets in southern Lebanon which have reportedly left nearly 500 dead, and strikes in Gaza including on a refugee camp, UN humanitarians said.
The development comes as the UN’s top official in Lebanon Jeanine Hennis-Plasschaert began an official visit to Israel to meet senior government officials, after insisting that “there is no military solution that will make either side safer.”
UN Secretary-General António Guterres said in a statement he was “gravely alarmed by the escalating situation along the Blue Line and the large number of civilian casualties, including children and women, being reported by the Lebanese authorities.”
Spokesperson Stéphane Dujarric cited thousands more displaced amid the most intense Israeli bombing campaign since October.
“The Secretary-General is also gravely alarmed by the continued strikes by Hezbollah into Israel. He expresses grave concern for the safety of civilians on both sides of the Blue Line, including UN personnel, and strongly condemns the loss of lives.”
In Lebanon, it has been reported that people in the south received phone and social media messages from the Israeli military telling them to keep away from any building or village linked to the militant group Hezbollah.
The armed group reportedly launched some 150 projectiles into northern Israel over the weekend, the latest in a series of Hezbollah attacks that began shortly after war erupted in Gaza, and which have uprooted around 60,000 Israelis to date. In southern Lebanon, some 30,000 people have been displaced from their homes.
The UN mission which patrols the Blue Line separating Lebanon and Israel, UNIFIL, expressed “grave concern for the safety of civilians,” amid what has been the deadliest day of violence and bombing by Israel since the October terror attacks sparked the regional crisis.
Lt. Gen. Aroldo Lázaro, Head of Mission and Force Commander of UNIFIL, has contacted both Lebanese and Israeli parties, emphasizing the urgent need for de-escalation. “Efforts are ongoing to reduce tensions and halt the shelling”, the mission added.
Any further escalation of this dangerous situation could have far-reaching and devastating consequences, not only for those living on both sides of the Blue Line but also for the broader region.
Attacks on civilians are not only violations of international law but could amount to war crimes, UNIFIL noted.
“It is essential to fully recommit to the implementation of UN Security Council Resolution 1701, which is now more critical than ever to address the underlying causes of the conflict and ensure lasting stability.”
Amid repeated calls from the international community for regional de-escalation, the Security Council met in emergency session last Friday, following deadly Israeli strikes on the Lebanese capital Beirut and in the south.
The meeting came at the end of a week of increased cross-border fire between Hezbollah and Israeli forces after two days of deadly wireless device explosions targeting the militant group.
UNITED KINGDOM
MEASURES COMING TO ADDRESS MIGRATION
New measures to cut historically high levels of net migration have been announced Sept. 24, bolstering the Home Secretary’s approach to tackle the root causes behind the UK’s long-term reliance on international recruitment.
Sectors most reliant on overseas workers will be targeted to ensure they are addressing their failure to invest in skills here in the UK.
The government will task the Migration Advisory Committee (MAC) with monitoring and proactively highlighting key sectors where skills shortages have led to surges in overseas recruitment and provide a yearly assessment to ministers to inform policy decision making.
Rules around visa sponsorship of migrant workers will also be strengthened so that strong action can be taken against employers who flout employment laws, restricting their ability to hire workers from abroad. This is in addition to work already underway to clamp down on existing sponsor license holders and to stop visa abuse, such as the ramping up of investigation visits by UK Visas and Immigration (UKVI), and suspending and revoking licenses where employers abuse the immigration system and exploit migrant workers.
This follows plans already set out by the Home Secretary to link migration policy with skills and wider labor market policy, so that international recruitment is no longer the default choice for employers filling skills shortages, as well as the government’s confirmation that changes made by the previous administration to the immigration system will remain in place.
The new joined-up approach across government, set out by the Home Secretary in July, establishes a framework in which the newly formed Skills England, the Industrial Strategy Council, together with input from the Department for Work and Pensions, will work closely with the MAC so that migration is not used as an alternative to tackling training or skills shortages in the UK.
MAC’s annual assessment will help industries respond swiftly to skills gaps and take necessary steps to reduce their dependency on migrant workers and invest in training, workforce plans, and higher quality jobs for workers here at home.
The expanded role for the MAC will be bolstered by additional capacity and includes work to assess the root causes of why certain sectors are so reliant on overseas workers. It has already been commissioned by the Home Secretary to look at IT and engineering – key sectors which have consistently relied on the international workforce, rather than sourcing the workers and skills they need here in the UK.
