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Visa CEO Alfred Kelly speaks at the Boston College Chief Executive Club Luncheon on September 27, 2018.
Brian Snyder | Reuters
Visa halted its efforts to take over Silicon Valley startup Plaid about two months after the Justice Department filed an antitrust complaint alleging it would limit competition in the payments industry.
The company said the decision to end the merger was mutual.
About a year ago, on January 13, 2020, Visa announced that it plans to acquire Plaid in a deal worth $ 5.3 billion, roughly double the last valuation. private sector of the start-up. The company’s API software, often referred to as the “plumbing” behind FinTech companies, allows start-ups to connect to users’ bank accounts. The company claims to integrate with more than 11,000 banks.
Plaid CEO Zach Perret said in a statement that the company will work with Visa as an investor and partner going forward.
The deal ran into a problem late last year after the DOJ pointed out that the Visa acquisition could eliminate an emerging competitive threat. The DOJ cited Visa CEO Al Kelly’s description of the deal as an “insurance policy” to neutralize a “threat to our significant debit business in the United States.”
The ministry argued at the time that it was possible for the agreement to extend a Visa “monopoly” on debit transactions, adding that it “must be stopped.”
The DOJ said in a statement Tuesday that ending the merger was “a victory for American consumers and small businesses.”
The lawsuit symbolized a milestone that many tech critics said should have been taken by the Federal Trade Commission when it approved Facebook’s acquisitions of Instagram in 2012 and WhatsApp in 2014.
These mergers are now a matter of public debate. Late last year, the FTC and several states filed antitrust lawsuits against Facebook, alleging it used its market power to crush its competitors before they could become real rivals to the Facebook empire. The lawsuits suggest remedies that could include requiring Facebook to part ways with the two companies.
– CNBC’s Kate Rooney and Lauren Feiner contributed to this report.
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