(Reuters) - The U.S. Department of Justice sued Visa for alleged antitrust violations on Tuesday, accusing one of the world's largest payment networks of suppressing competition by threatening merchants with high fees and paying off potential rivals.

Visa processes more than 60% of debit transactions in the U.S., bringing it $7 billion each year in fees collected when transactions are routed over its network, the Justice Department said. The company protects that dominance through agreements with card issuers, merchants, and competitors, prosecutors allege.

The bid to tackle the fees, sometimes known as swipe fees or interchange fees, is part of the Biden administration's efforts to combat rising consumer prices, a major issue in the Nov. 5 presidential election between Democrat Kamala Harris and Republican Donald Trump.

"Visa's unlawful conduct affects not just the price of one thing, but the price of nearly everything," Attorney General Merrick Garland said in a statement, noting merchants and banks pass payment network costs to consumers.

Visa's alleged anticompetitive conduct began around 2012, as competing companies entered the payments space following reforms that required card issuers to accommodate unaffiliated networks, a senior Justice Department official said.

The lawsuit seeks to have a judge in Manhattan impose requirements that would restore competition for services to process debit payments both online and at physical stores.

The Justice Department's antitrust division began investigating Visa over its debit card practices in 2021, the same year it blocked Visa's acquisition of financial technology company Plaid. Rival Mastercard ( MA ) said in April it was being investigated by the Justice Department as well.

Both companies have been in litigation for nearly two decades over their dominance in the cards market.

Visa and Mastercard ( MA ) agreed in 2019 to pay U.S. merchants $5.6 billion to settle damages claims in a class action lawsuit accusing them of anticompetitive practices.

A federal judge in Brooklyn rejected a parallel settlement in June that would reduce swipe fees by an estimated $30 billion over five years and require Visa and Mastercard ( MA ) to lift some rules that bar merchants from charging customers to use their cards.

Visa has set aside around $1.6 billion for potential settlements in other U.S. cases over interchange fees.