A civil antitrust lawsuit has been filed by the U.S. government as it tries to stop the acquisition of fintech firm Plaid by Visa.
The lawsuit, filed Thursday, describes Visa as a "monopolist" that is trying to buy Plaid in order to "eliminate a nascent competitive threat that would likely result in substantial savings and more innovative online debit services for merchants and consumers." According to the civil complaint, DOJ lawyers are asking the court to stop the acquisition transaction from taking place.
Word first emerged that the DOJ was investigating the planned acquisition late last month. Visa went public with its plan to buy Plaid in January.
“American consumers and business owners increasingly buy and sell goods and services online, and Visa – a monopolist in online debit services – has extracted billions of dollars from those transactions,” Assistant Attorney General Makan Delrahim said in a statement. “Now, Visa is attempting to acquire Plaid, a nascent competitor developing a disruptive, lower-cost option for online debit payments. If allowed to proceed, the acquisition would deprive American merchants and consumers of this innovative alternative to Visa and increase entry barriers for future innovators.”
In a statement, Visa said that it "strongly disagrees" with the DOJ's move.
"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," the firm said in a press release.