The U.S. Justice Department has initiated an antitrust lawsuit against Visa, accusing the financial giant of using its size and market dominance to hinder competition in the debit card sector, resulting in billions in costs for consumers and businesses.

The lawsuit, filed on Tuesday, claims that Visa penalizes merchants and banks that do not use its payment processing technology for debit transactions, despite the availability of alternatives. Visa collects an additional fee from each transaction processed on its network, and according to the DOJ, around 60% of debit transactions in the U.S. occur on Visa’s network, generating over $7 billion in fees annually.

Attorney General Merrick B. Garland stated, “We allege that Visa has unlawfully gained the power to impose fees far beyond what would be possible in a competitive market. Merchants and banks pass these costs to consumers by increasing prices or lowering quality and service. Thus, Visa’s illegal actions impact not just a single product, but nearly everything.”

The Biden administration has taken a strong stance against U.S. companies it views as acting like middlemen, including Ticketmaster’s parent company Live Nation and the real estate software firm RealPage, accusing them of imposing excessive fees and engaging in anticompetitive practices. Similar charges have been leveled against tech giants like Apple and Google.

According to the DOJ’s complaint, filed in the U.S. District Court for the Southern District of New York, Visa uses the volume of transactions on its network to impose commitments on merchants and banks, as well as on financial institutions that issue debit cards. This makes it challenging for merchants to switch to alternative payment processors without facing what the DOJ calls “disloyalty penalties” from Visa. The DOJ also claims that Visa hampers competition by paying for partnership agreements with potential rivals.

In 2020, the DOJ attempted to block Visa’s $5.3 billion acquisition of financial technology startup Plaid, arguing it would eliminate a potential competitor. That deal was eventually abandoned.

Visa previously acknowledged an investigation by the Justice Department in 2021 and stated it was cooperating with inquiries into its debit practices. Since the pandemic, there has been a global increase in online shopping, boosting Visa’s revenue from fees. Even businesses that typically deal in cash, like bars and coffee shops, have begun accepting card payments, often through smartphones.

KBW analyst Sanjay Sahrani noted that U.S. debit revenue likely comprises only about 10% of Visa’s total revenue, suggesting a limited financial impact from the lawsuit if it affects this segment. He also indicated that the case could extend for years if not settled and proceeds to trial.

During the quarter ending June 30, Visa processed $3.325 trillion in transactions, marking a 7.4% increase from the previous year. U.S. payments grew by 5.1%, outpacing economic growth.

Visa, headquartered in San Francisco, has not yet commented on the lawsuit. Following the news, Visa’s shares dropped by $13.53, or 4.7%, to $275.10 in afternoon trading.