DOJ files lawsuit against Visa’s acquisition of Plaid. The United States Department of Justice is filing suit against Visa for its acquisition of Plaid. The DoJ is arguing it as an illegal play to achieve monopoly.
According a complaint filed by the DoJ on Thursday, “Visa seeks to buy Plaid — as its CEO said — as an ‘insurance policy’ to neutralize a ‘threat to our important US debit business.’ By acquiring Plaid, Visa would eliminate a nascent competitive threat that would likely result in substantial savings and more innovative online debit services for merchants and consumers.”
Visa’s acquisition of Plaid was made public back in January. In subsequent months, Plaid faced multiple legal actions for customer data misuse. In October, the DoJ called on information from Bain & Company as part of its probe into Visa’s acquisition of Plaid.
The legal action by Visa claims that by purchasing Plaid, Visa will own a major potential rival in the digital debit sector. Such a move, the DoJ is arguing, risks limiting sector growth and gives Visa carte blanche on pricing.
The payments giant, however, called the claims unfounded, stating the acquisition ultimately helps consumers, according to comments provided by a Visa representative to the Wall Street Journal today. “Visa intends to defend the transaction vigorously,” the representative said. “Visa’s business faces intense competition from a variety of players — but Plaid is not one of them.”