New year, same fees: The debate over credit card swipe fees continues
Even as inflation cools, small businesses across the country are feeling the heat from credit card swipe fees as more consumers pay with plastic. “Swipe fees” is the catchall term for businesses’ payments to banks and card companies each time customers use their credit or debit cards to pay.
While a federal rule caps debit card swipe fees at 21 cents per transaction, fees for credit card swipes can be much higher. Businesses have seen credit card transactions only go up as more and more people opt to link their card to mobile payment apps.
According to the Nilson Report, which tracks the card and mobile payment industry, in 2023 the U.S. saw $172 billion in swipe fees. Nilson Report said merchants paid Visa and Mastercard an average of 2.26% in swipe fees, accounting for more than $100 billion.
Visa accounted for 52% of all spending on the U.S.’ four major credit card networks, which also includes Mastercard, American Express and Discover.
On top of that, some of Visa’s fees just went up on Jan. 1. That move comes amid growing pushback from critics, including some lawmakers, who say swipe fees are excessive and frequently get passed on to shoppers.
In September, the Justice Department filed a lawsuit accusing Visa of maintaining an illegal monopoly over debit card payment networks, which Attorney General Merrick Garland said has impacted the price of “nearly everything.”
Visa and Mastercard also agreed to a $30 billion settlement in March, meant to reduce their swipe fees by four basis points for three years. However, a federal judge rejected the settlement in June, saying they could afford to pay more.
Congress has taken up the fight, proposing the Credit Card Competition Act. The bipartisan bill, which has stalled, would boost competition among credit card processing companies, which advocacy group Merchants Payments Coalition says is essential.
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.’”
Meta must face FTC antitrust trial over purchasing Instagram and WhatsApp
After several years of back and forth, Meta will face trial in the antitrust case brought on by the Federal Trade Commission (FTC) over the company’s acquisitions of Instagram and WhatsApp. A federal judge denied Meta’s request Wednesday, Nov. 13, to drop the FTC’s case, which accuses Meta of buying the two social media platforms to crush emerging competition in social media.
Meta has argued the entire case should be dismissed on grounds that the company faces competition from apps like TikTok.
“We are confident that the evidence at trial will show that the acquisitions of Instagram and WhatsApp have been good for competition and consumers,” the spokesperson said.
A hearing to discuss a trial date is set for later this month.
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.
DirecTV to acquire Dish Network in major satellite merger
Major moves are being made in the satellite TV industry. Satellite TV provider DirecTV is acquiring its longtime rival — Dish Network — in a deal valued at nearly $10 billion.
The network is making the big move in an attempt to compete with the growing number of streaming services. The two sides announced the long sought-after merger on Monday, Sept. 30, which involves all of EchoStar’s satellite TV business. The deal also includes the streaming platform Sling TV.
The two pay-TV operators will bring a combined 20 million subscribers into the merged company. In a statement DirecTV said it will pay a “nominal consideration” of $1 to buy EchoStar’s pay-TV business. The catch to the low price is that DirecTV has agreed to assume around $9.8 billion of Dish’s debt.
Also announced is that AT&T is selling its 70% stake in DirecTV to private equity firm TPG, a deal which is itself worth about $7.6 billion. DirecTV said the combined company will “have increased scale to incentivize programmers to allow” it to “deliver smaller packages at lower price points.”
EchoStar meanwhile says the transaction will help it build out its 5G network through its Boost Mobile brand.
Dish Network chairman Charlie Ergen was at the head of a previous push for a deal between the two companies, which was blocked in 2002 by the Department of Justice. Analysts say the deal will likely be allowed this time due to the changing landscape in the last two decades of the business of TV and streaming services.
Dish and DirecTV expect the deal to close in the fourth quarter of 2025.
Is Google just better? Company defends advertising tech after losing search case
Court is back in session and Google is back on the defense. A month after a federal judge ruled Google is a monopoly because of its search engine, the Big Tech firm is defending its advertising practices. The cases could multiply calls to break up Google.
In a new antitrust trial starting Monday, Sept. 9, the Department of Justice will argue that “Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.”
Essentially, the government is arguing Google has an unlawful monopoly as the leading buyer and seller of digital ads.
The case centers around Google Ad Manager, which websites use to sell advertising space on their sites. The tech comes from Google’s $3.1 billion acquisition of DoubleClick in 2008.
“DoubleClick, which was founded in 1996, provides display ads on Web sites like MySpace, The Wall Street Journal and America Online as well as software to help those sites maximize ad revenue.”
While MySpace and AOL are irrelevant today, the DoubleClick acquisition helped make Google a display ad powerhouse in a space that was just getting started. Back then, the Federal Trade Commissionapproved the DoubleClick acquisition, saying it was unlikely to substantially lessen competition. The European Commission also approved the deal.
Today, the government is trying to walk back that approval. Google is now more than 10 times the size it was when it bought DoubleClick. Additionally, ad business generated more than $30 billion in revenue in 2021, according to the government.
“In court, we will show that ad buyers and sellers have many options, and when they choose Google they do so because our ad tech is simple, affordable, and effective,” Google’s vice president of Regulatory Affairs wrote in a blog post Sunday, Sept. 8. “In short – it works.”
It is similar to the argument Google made defending its search engine practice; that its product is just better than the competition. And while Google lost that case, it’s appealing it.
When the search ruling came down, Straight Arrow News asked antitrust expert and former FTC Chair Bill Kovacic about the merits of Google’s argument.
“In making that argument, they are appealing directly to a policy position that has appeared in a number of earlier decisions; that you can’t take a successful enterprise and punish it for offering a better product,” Kovacic said. “So through the trial and certainly through the appeals, they will say, we may not be the perfect company, but there’s no way to explain our position except for our ability to provide our users a better and better experience, and certainly superior to anyone else’s.”
“That’s a very important argument,” Kovacic continued. “But there are still limits on the steps they can take to reinforce the preeminence. But their overriding theme is going to be, ‘We are successful because we have a good product, and not because we use improper business tactics, the very proper tactic we use is offering users a better experience.’”
The advertising trial will not be as financially consequential as the search case: search is more than half of Google’s annual revenue. On Friday, Sept. 6, federal judge Amit Mehta, who ruled Google is a search monopoly, said he’d decide on a remedy by next August.
Break up Google? How the search giant might be punished for antitrust ruling
The antitrust ruling against Google on Monday, Aug. 5, is groundbreaking. By declaring Google is a monopoly, it marked the biggest tech antitrust ruling since Microsoft in the ’90s.
It’s not that the government never takes up these cases; it’s that the government doesn’t often win. And to be fair, it hasn’t won yet. Google plans to appeal and the tech world is closely watching how this one shakes out.
For what punishments Google could face to how long this case will drag out, Straight Arrow News tapped the expertise of Bill Kovacic, a former FTC chair and commissioner.
This interview has been edited for length and clarity. Watch the interview in the video above.
Simone Del Rosario: What do you make of Google’s assertion that its product is just better?
Bill Kovacic: The language and the music of earlier decisions from the Supreme Court has been one that’s very solicitous of the successful firm that achieves prominence through superior performance. So in making that argument, they are appealing directly to a policy position that has appeared in a number of earlier decisions that you can’t take a successful enterprise and punish it for offering a better product.
Through the trial and certainly through the appeals, they will say, “We may not be the perfect company, but there’s no way to explain our position except for our ability to provide our users a better and better experience and certainly superior to anyone else’s.”
That’s a very important argument, but there are still limits on the steps they can take to reinforce the preeminence.
Simone Del Rosario: Let’s say that this judgment stands. What’s going to happen to Google? What are the likely punishments that Google will face?
Bill Kovacic: Judge Mehta, who is the trial judge in the Google case, decided to split the proceedings into two parts. The first part was going to be the trial on whether the law had been broken. That part has been concluded with his opinion that finds that yes, indeed, in some respects, the law was broken.
The second part was that if there was a finding of liability, we’re going to have a separate proceeding on remedies. He’s going to have a meeting with the parties in early September to schedule the hearing or hearings that will take place to address the remedy.
We’re a good two years away from a final answer with respect to liability and to remedies.
Bill Kovacic, former FTC Chair and Commissioner
We probably will see, I suppose, several days of testimony by experts who lay out their views about what the remedy should be. Should it simply be an injunction that tells Google not to engage in the same behavior? Should it mandate that the company take affirmative steps to correct the effects of the behavior that it’s engaged in so far? Will the court go further to say a restructuring of the company is important? That a divestiture of some kind, say, for example, divesting the Android franchise would be an appropriate solution.
The judge is going to have a significant proceeding on the remedy, I suspect, by the end of this calendar year. He will reach his decision about what that remedy should be. We’ll see the final opinion on remedy come out, again, by the end of 2024 with inevitable appeals to the U.S. Court of Appeals to the District of Columbia, which would be step one. That would take up most of 2025.
The Supreme Court is not obliged to review this case. It has complete discretion over its docket with respect to antitrust matters. My intuition is that this will be a compelling case for them to review. This will be a case that they want to review to come in on these basic questions about the application of the antitrust law to Big Tech, to dominant firms generally. So my own quiet wager is that the Supreme Court would take the case. That takes us through most of 2026.
So if all of these appeals come about, we’re a good two years away from a final answer with respect to liability and to remedies. And for a case that began in 2020, in the second half of 2020, 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. That’s roughly the timeline that might unfold.
Simone Del Rosario: And just to clarify, the remedies can be prescribed before this appeal process goes through even if they can’t be enforced, is that correct?
Bill Kovacic: Correct. The appeal would take place after the decision on remedies so that the parties would be filing their appeals with respect to decisions about whether the law was broken and with respect to the judge’s decision about what the appropriate remedy will be. It’s proceeding on remedies next, then the parties can appeal any part of what’s taken place before.
Simone Del Rosario: And you mentioned some relatively low-level remedies, an injunction, fines. Would that be enough to stop this behavior that the courts found was monopolistic?
Bill Kovacic: This is a point of enormous and contentious debate. I would say if you go back to the beginning of the U.S. antitrust system, the remedy that generally has been seen to be, by many observers, the necessary remedy for illegal monopolization, is structural relief, simply put, a breakup. You force the company to make major divestitures.
That is the big visible solution that many observers look for. By contrast, the injunction that you referred to is seen as often being too timid a solution, too difficult to oversee and apply, too easily evaded by companies that will adapt immediately to any control on conduct that you put before them.
Part of what makes up the debate today is a more sympathetic view about these injunctions. And the more sympathetic view basically goes like this. One is that the injunction forces the company to change its decision-making process. It means that more matters are run by the lawyers first. And instead of the business people simply acting immediately and impulsively on ideas they have, it’s got to go through the legal department.
The legal department, being somewhat more inherently cautious as a matter of culture, applies the brakes a bit to this process so that there’s an internal decision-making process that means that the company is less aggressive in the way in which it operates.
A second consequence is that there’s an awareness on the part of other firms that they have a bit more room to maneuver. They take advantage of the hesitation and limits on the dominant firm to find crevices in the market in which they can enter to expand their operations over time.
Now one theory is that when the government settled its monopolization case against Microsoft, a case brought in the late ’90s and settled in the early 2000s – in parallel with a case that was settled by the European Union, also involving claims of illegal conduct against Microsoft – initially the conduct-related remedies were heavily criticized as being too weak.
A new reinterpretation of that is that those remedies actually gave breathing room for what were then nascent tech competitors named Google, for example, and that it opened the path for Google to prosper.
So I’d say there’s an important strand of modern commentary that says conduct remedies can be a lot more potent than you might think. They may take longer to unfold. They don’t have the big bang explosion of a giant fireworks display. They’re less visible in that respect. But then they can have a powerful impact on the way that the market operates.
I think that even the specialists in the field would say there’s a lot of uncertainty about what the best solution is. You make your best judgment. It’s partly an act of faith that you’ve got the right solution in place. But I’d say that there’s a somewhat more sympathetic view of conduct remedies emerging that might incline the judge to say, that would be enough.
A federal judge ruled Google is a monopoly. What happens now?
Google is a monopoly that illegally maintained its stranglehold on the search world, a federal judge ruled Monday, Aug. 5. It’s a major antitrust victory for the Justice Department against Big Tech, and could impact other antitrust lawsuits against Google, Apple, Amazon and Meta. Google said it plans to appeal the decision.
The suit narrowed in on Google’s practice of paying billions to the likes of Apple and Samsung to have Google automatically handle searches on those devices. The New York Times said Google paid Apple $18 billion to be the default search engine back in 2021.
Lawyers for the government said that influence stopped competitors from being able to develop a product that could compete with Google on its massive scale. They also claimed the monopoly allowed Google to raise prices for ads shown in search results beyond what would be commanded by the market.
In a statement, Google Global Affairs President Kent Walker wrote, “This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available.”
“We plan to appeal,” Walker added. “As this process continues, we will remain focused on making products that people find helpful and easy to use.”
During the trial, Microsoft’s CEO claimed the “oligopolistic” relationship Google had with Apple could push Google to dominate the AI race if it wasn’t stopped. Microsoft’s Bing is the closest competitor to Google when it comes to search, but it is by a very wide margin.
Now the future of the search giant is in the hands of Judge Amit Mehta of the U.S. District Court for the District of Columbia. In his ruling, Mehta wrote, “Google is a monopolist, and it has acted as one to maintain its monopoly.”
This ruling does not yet come with a remedy. Mehta will have to decide if the way to correct Google’s monopoly is to potentially change the way it operates or force it to sell off part of its business.