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The United States Department of Justice has seen victory in a major fintech acquisition case that could pave the way for a host of antitrust actions.
On Tuesday, the DoJ announced that Visa and Plaid had ended their proposed merger. Initially announced almost exactly a year ago, Visa planned to pay out $ 5.3 billion for the upstart tech firm.
Plaid’s ubiquitous software is designed to securely connect disparate financial data systems. In its November 2020 complaint, the DoJ alleged that Visa was using the acquisition to stifle competition. Today Makan Delrahim of the DoJ Antitrust Division said:
“Visa – which has immense online debit power in the United States – has extracted billions of dollars from these transactions. Now that Visa has abandoned its anti-competitive merger, Plaid and other future fintech innovators are free to expand. potential alternatives to Visa’s online debit services. With more competition, consumers can expect lower prices and better services. “
Technology, in general, has been at the center of heated debates about antitrust violations. Shortly before its lawsuit against Visa, the DoJ filed an antitrust lawsuit against Google. Meanwhile, the Federal Trade Commission is suing Facebook.
In both cases, the governing bodies argue that the platforms have used their access to competitor data and their ability to drive buyer traffic to corner the market. But American antitrust stems mainly from the Sherman Act of 1890, which barely predicted that data would become the new oil, when oil did not even become the new oil. Meanwhile, for the past two decades, big tech platforms have been the miracle of the U.S. economy, leaving most officials hesitant to slow their deployment.
This special status has come under criticism of late, especially since 2016. We are now witnessing a major rearmament of the US antitrust apparatus for a new era.
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