Supermarket chain Albertsons announced Wednesday, Dec. 11, that it filed a lawsuit against Kroger. The suit comes after a district judge in Oregon blocked a $25 billion merger between the two companies.
Albertsons claims Kroger didn’t do what was necessary to get regulatory approval for the deal.
“Albertsons is seeking billions of dollars in damages from Kroger to make Albertsons and its shareholders whole,” the company said in a statement. “In addition to the $600 million termination fee, Albertsons is entitled to relief reflecting the multiple years and hundreds of millions of dollars it devoted to obtaining approval for the merger, along with the extended period of unnecessary limbo Albertsons endured as a result of Kroger’s actions.”
In October 2022, the two grocery giants agreed to what would have become the largest U.S. merger in supermarket history. If the deal had gone through, Kroger and Albertsons would have accounted for roughly 5,000 stores.
At the time, they said it would help them compete with Amazon and Walmart. Both companies have made big plays in the grocery store space.
But District Judge Adrienne Nelson said Tuesday, Dec. 10, the deal would harm customers. Nelson discounted the Amazon competition aspect, pointing out grocery stores have a specific role in the consumer landscape. She also said the merger’s impact on competition must not be underestimated.
“Kroger willfully breached the Merger Agreement in several key ways, including by repeatedly refusing to divest assets necessary for antitrust approval, ignoring regulators’ feedback, rejecting stronger divestiture buyers and failing to cooperate with Albertsons,” Albertsons said in the statement.
Kroger has yet to respond to the lawsuit publicly.
In terminating the deal, Albertsons CEO Vivek Sankaran says the company is ready for the next chapter.
“Over the last two years, we have invested in our core business and in new sources of revenue, while enhancing our capabilities through the rollout of new technologies,” he said in a statement.
As news of the lawsuit came out, both companies’ stocks opened trading up on Wednesday, Dec. 11.
FTC probe targets Microsoft’s business model in Lina Khan’s last stand
It might be FTC Chair Lina Khan’slast stand. The Federal Trade Commission (FTC) launched a sweeping investigation into Microsoft, according to multiple reports.
A demand for information that’s “hundreds of pages long” drills “into everything from the company’s cloud computing and software licensing businesses to cybersecurity offerings and artificial intelligence products,” according to Bloomberg.
The investigation comes after more than a year of preparation but less than two months before a new administration.
Antitrust enforcers have stretched the boundaries under President Joe Biden with 35-year-old Khan leading the charge at the FTC.
Her latest shot at Microsoft, the world’s third-largest company, will drill into a longstanding criticism of Microsoft that bundling its services makes it hard for other companies to compete.
For instance, for years Slack and Zoom have complained about Microsoft bundling Teams with the likes of Word and Excel for free.
These antitrust complaints gained steam in the European Union, where a year ago Microsoft agreed to unbundle Teams from Office 365 in the European Economic Area. Six months later, they made the change globally.
Khan’s team will also look closely at Microsoft’s growing power in the AI space. Microsoft is the largest investor in OpenAI, the company behind ChatGPT.
The latest investigation comes after Khan lost a major case which tried to block Microsoft from acquiring Activision Blizzard for $69 billion.
This latest look into Microsoft comes about a quarter of a century after the Justice Department tried to break up the Big Tech giant. They later settled for a less extreme antitrust solution.
As for Khan, it is widely believed she’ll be out the door with the incoming Trump administration, despite being able to call Vice-president elect JD Vance one of her fans.
Mexico’s president refutes Trump’s claim she promised to close the border
President-elect Donald Trump said Mexico has agreed to stem the tide of migrants flowing into the United States, but Mexico’s president is now saying that’s not quite accurate. And Amazon workers are using Black Friday to make a statement about their labor situation. These stories and more highlight your Unbiased Updates for Friday, Nov. 29, 2024.
Mexico’s president refutes Trump’s claim she promised to close the border
As President-elect Donald Trump gets ready to return to office, he’s already making moves to follow through on some of his biggest campaign promises. After announcing this week his plans to impose tariffs on goods from China, Canada and Mexico, he turned his attention to another hot-button issue: immigration.
It’s a bit of a case of “he said, she said” after Trump had a call with Mexican President Claudia Sheinbaum on Wednesday, Nov. 27. President-elect Trump posted on his Truth Social platform after the call saying Sheinbaum agreed to stop migration into the U.S. through Mexico, “effectively closing our southern border.”
Sheinbaum appeared to contradict Trump in a post of her own on X, saying in part, “Mexico’s position is not to close borders…”
She did, however, lay out Mexico’s “comprehensive strategy” for addressing the migration issue. In a separate post on X, Sheinbaum said during the call, she told President-elect Trump, “No caravans are arriving at the border because they are being attended to in Mexico.”
En nuestra conversación con el presidente Trump, le expuse la estrategia integral que ha seguido México para atender el fenómeno migratorio, respetando los derechos humanos. Gracias a ello se atiende a las personas migrantes y a las caravanas previo a que lleguen a la frontera.…
The two leaders also talked about how they’re addressing the U.S. fentanyl crisis.
The call was scheduled after Trump unveiled plans to slap 25% tariffs on all imports from Mexico to the U.S. as part of the effort to stem the flow of illegal drugs into the U.S. through Mexico.
Not only would that impact the prices of avocados and agave — both very popular in the U.S. — Mexico’s economy secretary said Wednesday 88% of all North American pickup trucks come from Mexico. Sheinbaum then suggested Mexico could retaliate with tariffs of its own.
“I hope he rethinks it,” Biden said. “I think it’s a counterproductive thing to do. You know, one of the things you’ve heard me say before is that we are – we have an unusual situation in America. We’re surrounded by the Pacific Ocean, the Atlantic Ocean, and two allies: Mexico and Canada. The last thing we need to do is begin to screw up those relationships.”
Economists forecast Trump’s planned tariffs would increase prices for American shoppers, costing the average U.S. household about $2,600 per year, according to an estimate from the Peterson Institute for International Economics.
Israel and Hezbollah both claim ceasefire violations
Barely three days into a 60-day ceasefire between Israel and the Iran-backed militant group Hezbollah in Lebanon, both sides are claiming violations.
Yesterday, Hezbollah had a precision-guided missile manufacturing site—today, they don’t.
Hezbollah’s largest precision-guided missiles manufacturing site, 1.4km wide and 70m underground, was struck and dismantled by IAF fighter jets yesterday.
Lebanese authorities also said two people, who were trying to return to southern Lebanon, were shot and wounded by Israeli forces. Lebanon’s health ministry said they were civilians, but the IDF claimed they were suspected of violating terms of the truce.
The agreement, brokered by the United States and France, includes an initial two-month ceasefire during which Hezbollah militants will withdraw north of the Litani River and Israeli forces are to return to their side of the border.
Thousands of Amazon workers to strike from Black Friday to Cyber Monday
Amazon workers in more than 20 countries, including the U.S., are on strike on some of the busiest pre-Christmas shopping days across the world. It started on Black Friday, Nov. 29, a day for bargain hunters to score some of the biggest discounts from stores across the country as holiday shopping kicks into high gear.
Organizers told the United Nations the so-called “days of resistance” are to hold Amazon accountable for alleged labor abuses, as well as “environmental degradation and threats to democracy.” According to ABC News, the strike could delay holiday deliveries.
The organizers said this is their fifth year of labor action against Amazon during the beginning of the holiday shopping season.
In a statement, Amazon said the group that organized the strikes is being “intentionally misleading” and promoting a “false narrative.” Management said the company offers great pay and benefits.
Canada sues Google over control of online ads
Canada’s antitrust watchdog said it is suing Google over alleged anti-competitive conduct in the company’s online advertising business. They’re calling for Google to sell off two of its ad tech services and pay a penalty.
The Competition Bureau said it’s necessary because an investigation into Google found the company “unlawfully” tied together its ad tech tools to maintain its dominant market position. Google insists the online advertising market is a highly competitive sector and is fighting the allegations.
This comes just a week after the U.S. Department of Justice asked a federal judge to force Google to sell its Chrome web browser, saying it continues to crush the competition through its dominant search engine.
America facing a live Christmas tree shortage again
As millions of Americans get ready to begin their search for the perfect Christmas tree, growers are having historic challenges getting them to sale lots, according to the Wall Street Journal.
The day after Thanksgiving is usually the biggest day for live tree sales, but since Thanksgiving came so late this year, it’s a very short selling season. On top of that, a nationwide shortage is expected thanks to severe weather across the country this year, such as a northeastern drought and North Carolina floods caused by Hurricane Helene. North Carolina is the second-biggest supplier of Christmas trees in the country.
Shoppers bought roughly 21.6 million real Christmas trees in the U.S. last year, according to the National Christmas Tree Association. The Department of Agriculture said the number of trees harvested in the U.S. has declined 30% since 2002, while the American population has grown 16% over the same period.
Alaska native air drops Thanksgiving turkeys to families in remote areas
In the most remote parts of Alaska a Thanksgiving turkey is hard to come by. So, one woman made sure families in roadless parts of the state had their holiday feast.
Pilot Esther Keim calls it “Alaska Turkey Bomb.” She flies in a small plane to off-the-grid homes and air drops frozen turkeys for families to enjoy for Thanksgiving.
Keim said it’s a tribute to a family friend who did the same thing for her family when she was growing up.
She started the tradition in 2022 after somebody that she knew told her they did not have much of a holiday dinner — and no turkey at all. Since then, she has delivered 30 to 40 turkeys every year to families living in remote areas of Alaska.
Biden’s DOJ wants to break up Google, here’s where Trump stands
The U.S. government under President Joe Biden wants to break up Google. But will the same hold true when the White House changes hands in January?
Back in August, a federal judge ruled Google illegally maintained a monopoly in internet search. This gave the Department of Justice a major antitrust victory in a case that actually started during the first Trump administration.
Now, the Biden DOJ says competition cannot be restored unless Google is forced to sell off Chrome, its dominant web browser. Judge Amit Mehta set a two-week hearing on remedies for April 2025, when President-elect Donald Trump will be back in charge of the DOJ.
“The new administration could come forward and say, ‘We mentioned a breakup – we don’t have the enthusiasm for it that we did before. Of course, Judge, if you thought it was appropriate, that’s your call, it’s not ours; you are ultimately the decision maker about remedy. But our view is that it’s no longer required and we’re not asking for it,’” former FTC Chair Bill Kovacic proposed as one possibility in an interview with SAN.
While Trump is no fan of Big Tech or Google, he has so far sidestepped calling for a breakup. In an interview with Bloomberg, Trump said Google was “rigged” but stopped short of saying he’d break them up.
“He said that he might not be fond of a breakup, that Google’s an important company, don’t want to injure them in some way,” Kovacic said.
However, he pointed out that prominent figures in Trump’s campaign, including his running mate, JD Vance, have made comments in support of breaking up Google.
“It seems within the upper echelon of the Trump brain trust that there’s a lot of enthusiasm for going through with the structural remedy,” Kovacic said.
Google said it is appealing the August ruling.
“The DOJ continues to push a radical agenda that goes far beyond the legal issues in this case,” Google’s Vice President of Regulatory Affairs Lee-Anne Mulholland told SAN in a statement. “The government putting its thumb on the scale in these ways would harm consumers, developers and American technological leadership at precisely the moment it is most needed.”
“We haven’t had something like this in ages, that is, to have the elaborate discussion of what antitrust law should do after a finding of liability in this kind of setting,” Kovacic said, “Google has the opportunity to come forward and say, ‘You wanted an extraordinary form of intervention. We have something that is much better, equally effective and not as disruptive.’”
In other words, while Google is appealing the monopoly ruling, it can still suggest less extreme remedies as the case proceeds.
The last time antitrust officials tried to break up a Big Tech company of this magnitude was Microsoft in the late ’90s and early 2000s. In the end, through a convoluted appeals process, the DOJ eventually backed off its call to break up Microsoft and settled for a lesser antitrust penalty.
“A big part of the task of the Justice Department in the coming months, if they want a breakup, is to give the judge assurances that it’s worth doing,” Kovacic said. “A number of judges in the past have said, ‘I’m a single unelected official bearing the burden of determining the future of an important sector. That makes me nervous. I’m willing to travel the path that the government suggests, but I want assurances that it is the right path.’”
DOJ to squeeze Google to sell Chrome to bust search monopoly: Report
The federal government is seeking to break up a tech giant for the first time in more than two decades. Antitrust officials are preparing to ask a federal judge to force Google to sell its Chrome operating system, according to a report from Bloomberg.
Judge Amit Mehta ruled in August 2024 that Google monopolized the search engine space. The case dates back to 2020, when the Department of Justice and attorneys general from 38 states and territories sued Google for anticompetitive practices.
The lawsuit focused on Google’s practice of paying billions of dollars to companies like Apple and Samsung to have Google be the default search provider on those devices. The New York Times reported the company paid $18 billion in 2021 to secure the right.
The Justice Department is expected to ask Mehta for a number of remedies to reduce Google’s monopoly in the industry, according to Bloomberg, who spoke with people familiar with the matter.
The biggest action would be forcing Google to sell Chrome, which is the most-used web browser on the planet, according to Statcounter. The DOJ contends the browser is a gateway for users to end up on Google’s search engine.
But with more than 3 billion monthly active users, a Bloomberg analyst estimates Chrome could be worth up to $20 billion. The hefty price tag would make it hard to find a buyer with the capital and know-how to take over the product. While a company like Amazon could entertain the option, it has also been fighting accusations of anticompetitive practices.
If the judge does force the sale, it’ll give regulators the corporate-busting victory they failed to secure against Microsoft decades ago. But this step is one of the tallest orders. Bloomberg reports the officials could choose to go a lesser route if other actions make the search market more competitive
“The DOJ continues to push a radical agenda that goes far beyond the legal issues in this case,” Google Regulatory Affairs Vice President Lee-Anne Mulholland told Straight Arrow News in a statement. “The government putting its thumb on the scale in these ways would harm consumers, developers and American technological leadership at precisely the moment it is most needed.”
Initially, regulators contemplated having Google sell off the Android mobile operating system but chose not to go that direction. Instead, they are planning to force the company to unbundle Android from its other products, including the Google Play store and the search engine.
DOJ officials may also require Google to share more information with advertisers and give them greater power over where their ads are shown. They will also recommend Google sell its search data to competitors, which could boost rivals and, by nature, make for a more competitive environment.
Google said it would appeal the August ruling and the states are still proposing remedies, according to Bloomberg. Meanwhile, Mehta set a two-week hearing in April 2025 on what remedies Google should take and plans to issue a final ruling by August 2025.
“If all of these appeals come about, we’re a good two years away from a final answer with respect to liability and remedies for a case that began in the second half of 2020,” former Federal Trade Commission Chair William Kovacic told Straight Arrow News in August. “I guess all of us can look at that and say, ‘Is that a sensible way to make decisions about such fundamental matters of economic policy and operation? A case that lasts the better part of seven years?’ But that’s what we’re in for going ahead.”
Microsoft accuses Google of ‘shadow campaigns’ to influence EU regulators
Microsoft publicly accused rival tech company Google of running “shadow campaigns” to discredit the competition to EU regulators. The accusations include funding a fake grassroots campaign to “mislead the public.”
“I’ve taken pains to tell the truth, even when that might make things more complicated for Microsoft,” Microsoft’s Deputy General Counsel Rima Alaily wrote in a blog post. “It’s not comfortable or natural for me to pen something critical of someone else, but in this case, I think it’s important because it concerns me when someone attacks us and, I believe, does so dishonestly.”
Microsoft claims Google hired an advisory firm to set up “an astroturf group” called the Open Cloud Coalition that is set to launch this week. A flyer linked in Microsoft’s blog post says it is a group of cloud platforms “being formed to advocate for a fair, competitive and open cloud services industry across the UK and EU.”
“It is designed to discredit Microsoft with competition authorities, and policymakers and mislead the public,” Alaily wrote. “Google has gone through great lengths to obfuscate its involvement, funding, and control, most notably by recruiting a handful of European cloud providers, to serve as the public face of the new organization.”
Alaily says Microsoft found out about the scheme from a company that chose not to join the Open Cloud Coalition.
“One of the companies approached, who ultimately declined, told us that the organization will be directed and largely funded by Google for the purpose of attacking Microsoft’s cloud computing business in the European Union and the United Kingdom,” Alaily said.
Google ranks third globally in the cloud market behind Amazon and Microsoft and has made multiple attempts to paint Microsoft as anti-competitive in the space.
“We’ve been very public about our concerns with Microsoft’s cloud licensing,” a Google Cloud spokesperson told Straight Arrow News in an email. “We and many others believe that Microsoft’s anticompetitive practices lock-in customers and create negative downstream effects that impact cybersecurity, innovation, and choice. You can read more in our many blog posts on these issues.”
“We’ve been speaking to many business and public sector organizations,” Google Cloud’s Head of Platforms Amit Zavery said in September. “What we’re seeing is a lot of restrictions Microsoft has created using their dominance in the on-premises software and not letting customers have a choice of moving that workload to any cloud provider of their choice.”
It’s not the first time Microsoft has faced criticism for bundling items and forcing users to adopt their products. The landmark antitrust case against Microsoft in the 1990s ruled Microsoft acted like a monopoly by restricting the ability to remove Internet Explorer and use other programs to surf the web. Microsoft avoided getting broken up on appeal and settled the case in 2001.
DOJ considers breaking up Google after judge’s ruling on monopoly practices
The U.S. Department of Justice (DOJ) is contemplating breaking up Google, following a federal judge’s ruling that the tech giant illegally monopolized the online search market. This move could dramatically reshape the tech landscape, targeting Google’s dominance in search, browsers and mobile operating systems.
The DOJ may ask a federal judge to force Google to sell off crucial parts of its business, marking Washington’s first attempt to break up a company for illegal monopolization since the Microsoft case two decades ago.
In a filing, the DOJ proposed sanctions aiming to prevent Google from leveraging products like Chrome, Android and AI to benefit its search business, potentially reshaping how technology giants conduct business.
At the heart of Google’s alleged monopoly lies a multibillion dollar strategy of securing default search engine status across devices. This practice has not only solidified Google’s market dominance but also raised significant concerns about fair competition.
Google’s annual payments reached $26.3 billion in 2021, with Apple receiving $18 billion to maintain its status as the default search engine on smartphones and browsers. The government said these exclusive agreements effectively stifled competition and limited consumer choice in the search engine market.
Federal prosecutors are considering measures that would require Google to open its search and AI data to competitors, which could reshape the landscape of digital innovation.
In a blog post, Google’s vice president of regulatory affairs, Lee-Anne Mulholland, called the DOJ’s proposed changes “radical.” She said the tech giant plans to make its case in court next year.
“This case is about a set of search distribution contracts,” Mulholland wrote. “Rather than focus on that, the government seems to be pursuing a sweeping agenda that will impact numerous industries and products, with significant unintended consequences for consumers, businesses, and American competitiveness.”
The judge in the case said he plans to rule on the remedies by August 2025.
Hurricane Milton barrels toward Florida’s already hard-hit west coast
Hurricane Milton, which strengthened to a Category 5 storm, spins closer to southwest Florida. And it’ll cost you a little more for a chance at the big Mega Millions jackpot. These stories and more highlight your Unbiased Updates for Tuesday, Oct. 8, 2024.
Hurricane Milton barrels toward Florida’s already hard-hit west coast
Still reeling from Hurricane Helene, Florida’s west coast is hunkering down once again as Hurricane Milton barrels that way. As of early Tuesday morning, Oct. 8, it was a Category 4 storm.
The storm intensified to a major Category 5 hurricane Monday before being downgraded. Still, it threatens to bring torrential rain to already-soaked and flooded parts of the Sunshine State.
The National Hurricane Center said people on Florida’s west coast should expect “devastating hurricane force winds” and life-threatening storm surges. Some predictions call for 15 feet of storm surge.
Evacuations have already been ordered in some parts of the state, including the Tampa Bay area. Residents in some areas have been told first responders are not expected to risk their lives to try to save those who do evacuate in time.
Less than 24 hours after the world marked one year of war in the Middle East, Israel exchanged deadly strikes with Hezbollah in Lebanon and Hamas in Gaza. Hezbollah has been striking Israel since its war with Hamas began as a show of solidarity for the other Iran-backed militant group, but the deadly violence has escalated significantly in recent weeks, with the killings of top Hezbollah leaders.
Trump, Harris commemorate anniversary of Oct. 7 terror attacks
As the 2024 presidential campaign heads into the final four weeks, both candidates marked the anniversary of the Oct. 7 terrorist attacks in Israel.
On Monday morning, Republican nominee former President Donald Trump visited the New York gravesite of a renowned rabbi in the Orthodox Judaism community, leaving a stone atop the headstone, a traditional Jewish custom.
Trump later held a remembrance ceremony at his golf club in Miami, which included Jewish community leaders, Holocaust survivors and Republican lawmakers.
“October 7 was not just the deadliest day for the Jewish people since the Holocaust, it was not just the worst terror attack since 9/11, it was an attack on humanity itself,” Trump said. “It was a hideous, incredible cruelty. It was chilling savagery. It was a demonic delight and the destruction of innocent life. On October 7, it seemed as if the gates of hell had sprung open and unleashed their horrors onto the world. And that’s exactly what happened.”
Democratic nominee Vice President Kamala Harris and her husband Second Gentleman Doug Emhoff helped plant a pomegranate tree outside the VP’s residence in Washington, D.C., dedicating it to the 1,200 people killed a year ago in Israel — including 46 Americans.
https://twitter.com/VP/status/1843457053966193110
“So, in this moment, on the one-year commemoration of October 7, what is asked of us?” Harris said. “What is asked of us? First and foremost, I believe that we must never forget. I will never forget October 7 and the world must never forget. What is asked of us? We must work to ensure nothing like the horrors of October 7 can never happen again. And on this solemn day, I will restate my pledge to always ensure that Israel has what it needs to defend itself, and that I will always work to ensure the safety and security of the Jewish people here and around the world.”
Later Tuesday, Vice President Harris will continue her media blitz with stops at “The View,” “The Late Show with Stephen Colbert” and “The Howard Stern Show.” On Wednesday, former President Trump is scheduled to hold two rallies in the battleground state of Pennsylvania.
Mexican mayor killed less than a week after taking office
Mexican President Claudia Sheinbaum is expected to present her strategy to confront the country’s security problems Tuesday. The country’s first woman president — inaugurated less than a week ago — is reportedly going to present a plan that will highlight law and order amid the growing violence linked to drug cartels and organized crime.
Arcos is the latest politician to be murdered in the country, with 37 candidates assassinated leading up to Mexico’s most recent elections this past June.
Google ordered to open app store after anti-trust ruling
The ruling comes in the wake of a jury verdict last year in favor of Fortnite game maker Epic Games, which found Google was illegally blocking competition.
Mega Millions raising ticket prices, improving odds to win
If you play the lottery, get ready to shell out more money for a chance at that mega jackpot. Mega Millions announced some big changes to its lottery game — including an increase in ticket prices.
Starting in April, tickets will cost $5 per play, more than double the current price of $2. It’ll be the game’s second price increase since 2002.
Mega Millions said this is all part of its “mega” overhaul, which will see improved odds of winning the jackpot and bigger jackpots more often.
Since launching more than 20 years ago, Mega Millions — which is played in 45 states, Washington, D.C. and the U.S. Virgin Islands — has seen six $1 billion winners.
Paul Pelosi sold over $500K in Visa stock before DOJ antitrust lawsuit: Report
Paul Pelosi, the husband of former House Speaker Nancy Pelosi, sold over $500,000 worth of Visa stock weeks before the U.S. Department of Justice filed an antitrust lawsuit against the credit card company. The sale raised concerns due to its timing and previous financial scrutiny on the Pelosi family.
According to public records, Pelosi sold 2,000 shares of Visa stock in early July, with the value estimated between $500,000 and $1 million. The timing of the sale coincides with the DOJ’s lawsuit, which accuses Visa of monopolizing the debit card market by offering incentives to financial technology companies such as PayPal, Stripe, and Square.
This is not the first time the Pelosi family’s financial activities have been scrutinized. Critics have raised concerns about potential access to private information due to Nancy Pelosi’s influential role in Washington.
A spokesperson for the former speaker responded, stating: “Speaker Pelosi does not own any stocks, and she has no prior knowledge or subsequent involvement in any transactions.”
Visa’s shares fell 5.5% following news of the lawsuit. The company has stated it will cooperate fully with the investigation and maintains that its business practices comply with U.S. laws.
Antitrust expert on Visa case: ‘It’s not enough to be big, you have to be bad’
The Department of Justice filed a federal antitrust lawsuit against Visa Tuesday, Sept. 24. The suit alleges the payments processor took part in anticompetitive practices in the debit card market that hurt merchants and consumers alike.
“Visa deploys a web of unlawful anti-competitive agreements to penalize merchants and banks for using competing payment networks,” Attorney General Merrick Garland said Tuesday. “At the same time, 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 government’s complaint centers around allegations that Visa makes deals with vendors to prevent them from using other processors. The DOJ claims this practice hinders other issuers from scaling up their business. Meanwhile, if a merchant doesn’t adhere to Visa’s “volume commitments” to use it for most of their transactions, they will reportedly incur fees.
“Attaining a monopoly by itself is not illegal under antitrust laws,” said Bill Kovacic, a former FTC commissioner and Global Competition Professor of Law and Policy at George Washington University. “It’s not enough to be big. You have to be bad as well.”
Garland pointed to a situation where Visa had a contract with Square, the operator of Cash App, to stop it from becoming a competitor. The attorney general cited an email where a Visa executive said, “We’ve got Square on a short leash.”
“The essential argument is that you buy off rivals to stay out of the way and that you impose exclusivity arrangements in your own contracts that make it harder for existing rivals to gain broader scale,” Kovacic said. “Those arguments have been arguments that the DOJ has used with considerable success.”
“Today’s lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving,” Visa’s General Counsel Julie Rottenberg said in a statement emailed to Straight Arrow News.
“Visa gets a chance to contest whether or not it is so powerful,” Kovacic said. “But second, to present evidence that saying, ‘Everything we do is good for our users. We give users a better experience. It’s good for the merchants in our network. It’s good for the end users, the consumers. So to the extent that we’ve succeeded, we have only succeeded by doing things that make our merchant partners and our consumers better off.’”
The Justice Department said more than 60% of debit transactions in the U.S. are done on Visa’s network. As a result, the company makes more than $7 billion annually in fees.
“Visa’s unlawful conduct affects not just the price of one thing, but the price of nearly everything,” Garland said as the DOJ claimed those fees are passed on to consumers.
The Justice Department did not offer any remedies for Visa if it were to be ruled against.
“The logical step would be first to prohibit the specific conduct that they’re complaining about, which would be to dissolve contractual provisions that create exclusivity that tends to dampen the competitive significance of rivals,” Kovacic said. “And the second might be to challenge or forbid the payments that are being made to other potential significant market players, to say, ‘The partnerships that you are pointing to are partnerships to suppress rivalry, rather than to increase it. You can’t do that anymore.’”
The lawsuit comes months after Capital One announced a $35 billion acquisition of Discover in February 2024. That deal, which would create the sixth-largest bank by assets, still faces regulatory approval. Capital One and Discover argue joining forces will allow it to better compete with Visa.
