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US Department Of Justice Files Case To Block Visa’s $5 Billion Acquisition Of Plaid

Visa is the latest tech company to be targeted by the United States Department of Justice over antitrust issues. The governmental body filed a lawsuit that will block Visa from buying software company, Plaid.


According to details from the case, the US Department of Justice claims that Visa buying Plaid is tantamount to establishing itself as an online payment monolith. This will encourage monopoly and make the industry anticompetitive, part of a report said.


Plaid specialises in software and it has a platform that enables customers connect their bank accounts to other apps. Visa had announced that it was buying Plaid for $5.3 billion in January 2020. A ZDNet article quoting an earlier announcement of the deal says; “one in four US bank account holders use Plaid technology to share information and connect to app services.”


While Visa claims that Plaid will run independently after the deal, there are also claims that Visa is buying the company because it perceives it as a threat. The Department of Justice have always frowned on bigger companies buying smaller ones that they perceive as threats. This one of the major bone of contention between the department and Facebook.

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It says that Plaid would be a Visa competitor in a matter of years if it is allowed to grow on its own or if a rival of Visa eventually acquires it. Another statement from the lawsuit mentions that Visa had made deals with US banks that made it hard for its rivals, Mastercard to compete on fair grounds.


A Visa spokesperson says that this is not the case. The person revealed to ZDNet: “Visa strongly disagrees with the DOJ, whose attempt to block Visa’s acquisition of Plaid is legally flawed and contradicted by the facts. This action reflects a lack of understanding of Plaid’s business and the highly competitive payments landscape in which Visa operates.


“The combination of Visa and Plaid will deliver substantial benefits for consumers seeking access to a broader range of financial-related services, and Visa intends to defend the transaction vigorously. As we explained to the DOJ, Plaid is not a payments company. Visa’s business faces intense competition from a variety of players — but Plaid is not one of them.”


Anticompetitive acquisition is strongly frowned on by the US Department of Justice. It labels this practice under its antitrust laws. The department still has cases against bigger brands like Facebook, Google, Amazon, and Apple.


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Onwuasoanya Obinna

A reader of books and stringer of words. Passionate about Science and Tech. When not writing or reading he is surfing the web and Tweeting.

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