The Justice Department is reportedly investigating whether Visa's debit-card business is anticompetitive

• The Justice Department is investigating Visa, The Wall Street Journal reported.
• The DOJ is said to be looking into whether Visa has kept its market share by anticompetitive means.
• Visa shares fell about 4% following the Journal report.

The payments giant Visa is being investigated by the Justice Department over whether it engaged in anticompetitive practices that kept merchants from using less expensive card networks, The Wall Street Journal reported Friday, citing people familiar with the matter.

The agency is probing whether the company has restricted these merchants from routing debit-card transactions over less expensive card networks and whether those actions would allow Visa to keep its leading market position illegally, the paper said.

Visa shares fell as much as 4% following the report. The company declined to comment, and the Justice Department did not immediately respond.

Visa is the largest card network in the US. Twenty-nine percent of card transactions in 2019 were made with Visa-powered debit cards, whereas Mastercard debit cards represent 12% of all card purchases, according to Nilson. Visa also leads in credit cards, with a 31% market share.

Visa was planning to raise merchant fees this year. But amid the COVID-19 pandemic, the company, along with Mastercard, decided to wait another year.

Makan Delrahim, the DOJ's antitrust boss, has said under the Biden administration the department will continue to scrutinize major tech companies such as Google, Facebook, and Apple. The Journal added that the fintech sector had also come under more scrutiny as digital payments and marketplaces grow.

The DOJ has previously alleged anticompetitive practices at Visa.

In November, the DOJ sued to block Visa's $5.3 billion acquisition of the data aggregator Plaid. In the suit, the regulator alleged that Visa's acquisition was an effort to squash a competitor. The DOJ alleged that Plaid was working on a payments product that could be a substitute for debit cards.

"Visa is a monopolist in online debit transactions, extracting billions of dollars in fees annually from merchants and consumers," the DOJ said in the complaint.

According to the suit, Visa earned over $4 billion from its debit business in 2019, including roughly $2 billion from online debit, where a Plaid's new payments offering would compete with the card giant.

"By acquiring Plaid, Visa would eliminate a nascent competitive threat that would likely result in substantial savings and more innovative online debit services for merchants and consumers," the DOJ added.

Visa and Plaid mutually agreed to terminate the deal in January.