The Justice Department filed an antitrust lawsuit against Visa on Tuesday, accusing the financial giant of unfairly stifling competition in debit cards.

For more than a decade, the government claims in its complaint, Visa has entered into de facto exclusive agreements with merchants and banks, encouraging them to route the bulk of their transactions through Visa’s payment network. The company has maintained a monopoly in large part by imposing or threatening to impose higher fees on merchants that also use other payment networks to process debit transactions, according to the Justice Department.

The lawsuit stems from an investigation dating back years. It is part of a series of efforts made by enforcers under the Biden administration to target corporate middlemen, which it says needlessly increase fees, and take aim at power wielded by companies.

Visa is a very big middleman: It processed $3.8 trillion in U.S. debit transactions in the year through June, generating over $7 billion in processing fees per year, the Justice Department said. Those account for more than 60% of all such transactions.

Visa’s fees, which are largely invisible to the public, are paid by merchants and can be passed on to consumers, hitting younger and lower income Americans the hardest, Benjamin Mizer, the Justice Department’s third-ranking official, said at a news conference Tuesday.

Julie Rottenberg, Visa’s general counsel, said in a statement: “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.”

Rottenberg added, “this lawsuit is meritless, and we will defend ourselves vigorously.”

— New York Times

Consumer confidence index drops in August

American consumers are feeling less confident this month as concerns about jobs rose significantly.

The Conference Board, a business research group, said Tuesday that its consumer confidence index fell to 98.7 in September, from 105.6 in August. It was the biggest month-to-month decline since August of 2021.

The survey was conducted before the Federal Reserve announced a bigger-than-expected half-point interest rate cut last week.

National landlord to pay $48M settlement

The nation’s largest owner of single-family homes for rent has agreed to pay $48 million to settle claims by the Federal Trade Commission that it reaped millions of dollars via deceptive business practices, including forcing tenants to pay undisclosed fees on top of their monthly rent.

Under the terms of the proposed settlement, Invitation Homes also agreed to ensure it is clearly disclosing its leasing prices, establish procedures to handle tenant security-deposit refunds fairly and cease other unlawful practices, the FTC said Tuesday.

In the complaint, filed in federal court in Atlanta, the FTC claims that the Dallas-based company used “deceptive advertising and unfair practices” to charge millions of dollars in bogus fees that harmed tens of thousands of people.

These mandatory fees, charged for internet packages, air-filter delivery and other services, were not disclosed in the monthly rental rates that Invitation Homes advertised, the FTC claims.

FTX founder’s cohort gets 2-year sentence

Caroline Ellison, a former top executive in Sam Bankman-Fried’s fallen FTX cryptocurrency empire, was sentenced to two years in prison on Tuesday after she apologized repeatedly to everyone hurt by a fraud that stole billions of dollars from investors and customers of what once seemed like a groundbreaking company in an emerging financial industry.

U.S. District Judge Lewis A. Kaplan said Ellison’s cooperation in the case was “very, very substantial” and praised her testimony, saying he saw no inconsistencies with documents shown to the jury or things she had previously told prosecutors.

But he said a prison sentence was necessary because she had participated in what might be the “greatest financial fraud ever perpetrated in this country and probably anywhere else” or at least close to it.

He said in such a serious case, he could not let cooperation be a get-out-of-jail-free card.

She was ordered to report to prison Nov. 7.

— From news services