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U.S. Department of Justice Probes Mastercard for Possible Antitrust Violations

The U.S. Department of Justice (DOJ) is conducting an investigation into Mastercard Inc (MA) concerning potential breaches of antitrust regulations within its debit-card business. In April, Mastercard received a civil investigative demand from the department, requesting documents related to the potential infringement, according to Bloomberg.

Mastercard is cooperating with the investigation, which centres on its U.S. debit programme and competition with other networks and technologies. The DOJ’s actions come nearly two years after initiating a similar inquiry into Visa Inc’s (V) practices.


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DOJ Investigation into Visa’s Debit Practices

The regulator started looking into Visa’s debit practices after prosecuting the company over its planned $5.3 billion acquisition of Plaid Inc. Ultimately, the companies were forced to abandon the deal due to anti-competitive concerns.

Mastercard CFO Sachin Mehra commented in an interview, “It’s hard to speculate about the potential outcome, but these types of investigations do take a number of years.”


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DOJ Inquiry Stems from 2010 Law

The DOJ investigation arises from a 2010 law requiring banks to include two competing networks on their debit cards. Smaller competitors to Visa and Mastercard, such as Pulse, Star, and NYCE, can offer lower-cost transaction routing options for merchants compared to the more prominent players.

Price Action: Mastercard Shares Dip

Price Action: MA shares traded lower by 1.67% at $373.67 in premarket trading at the last check on Monday.

“Truth—or, more precisely, an accurate understanding of reality—is the essential foundation for any good outcome.” – Ray Dalio

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