The United States Department of Justice saw a victory in a major fintech acquisition case that could set the stage for a series of antitrust measures.
On Tuesday, the DoJ announced that Visa and Plaid had given up on the planned merger. Originally announced almost exactly a year ago, Visa planned to pay $ 5.3 billion for the new technology company.
Plaid’s ubiquitous software is designed to securely connect distinct financial data systems. In its November 2020 complaint, the DoJ claimed that Visa was using the acquisition to extinguish competition. Today, Makan Delrahim, from the DoJ’s antitrust division, said:
“Visa – which has immense power in online debt 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 develop potential alternatives to online debit services. With more competition, consumers can expect lower prices and better services. ”
Technology in general has been at the center of turbulent debates about antitrust violations. Just before his case against Visa, the DoJ filed an antitrust lawsuit against Google. Meanwhile, the Federal Trade Commission is suing Facebook.
In both cases, government agencies argue that the platforms used their access to competitors’ data and the ability to direct buyer traffic to monopolize the market. But the United States’ antitrust derives primarily from the Sherman Act of 1890, which hardly predicted that data would become new oil, when oil had not yet become new oil. Meanwhile, for the past two decades, major technology platforms have been the wunderkinder of the American economy, leaving most public officials hesitant to slow their performance.
This special status has been criticized recently, especially since 2016. What we are witnessing now is a major rearmament of the US antitrust apparatus for a new era.