Visa refused to buy Plaid due to antitrust lawsuit by US Department of Justice

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U.S. Visa Inc. refused to buy the financial-technology company Plaid for $5.3 billion amid a U.S. Department of Justice antitrust lawsuit that challenged the deal, the U.S. Justice Department said on Tuesday. The U.S. Justice Department announced this on Tuesday.

The Justice Department filed an antitrust lawsuit last November alleging that the deal would allow Visa to illegally maintain a monopoly in the online debit payment market. According to the government, Plaid posed an incipient but serious competitive threat to Visa in that market, and eliminating such a threat would result in higher prices, slower innovation and higher barriers to entry for competitors.

Visa initially pledged to defend the deal, and a hearing was scheduled for June in federal court in Northern California. However, Visa and Plaid made a joint decision to terminate the merger agreement.

Visa CEO and chairman Al Kelly said he believes the companies ultimately would have won the lawsuit because Plaid’s services complement Visa’s. “However, a full year has passed since we first announced our intention to acquire Plaid, and the protracted and complex litigation is likely to take considerable time to fully settle,” said Kelly, who was quoted in a press release from the companies.

According to Macan Delrahim, head of the Justice Department’s antitrust division, the cancellation of the deal is in the best interest of consumers. “Plaid and other future innovative fintech companies are free to develop potential alternatives to Visa’s online debit services,” he was quoted as saying in the department’s release. – With more competition, consumers can look forward to lower prices and better service.”

Visa, the operator of the largest U.S. payment system, announced its intent to buy Plaid in mid-January of last year. Since then, the Justice Department has been reviewing the deal.

Visa planned for the deal to close within three to six months.

Plaid, which was valued at about $2.65 billion in a late 2018 funding round, allows users to link bank accounts to financial-tech platforms, including Mint, Acorns, Venmo and Betterment

Translated with www.DeepL.com/Translator (free version) that challenged the deal, the U.S. Justice Department said on Tuesday. The U.S. Justice Department announced this on Tuesday.

The Justice Department filed an antitrust lawsuit last November alleging that the deal would allow Visa to illegally maintain a monopoly in the online debit payment market. According to the government, Plaid posed an incipient but serious competitive threat to Visa in that market, and eliminating such a threat would result in higher prices, slower innovation and higher barriers to entry for competitors.

Visa initially pledged to defend the deal, and a hearing was scheduled for June in federal court in Northern California. However, Visa and Plaid made a joint decision to terminate the merger agreement.

Visa CEO and chairman Al Kelly said he believes the companies ultimately would have won the lawsuit because Plaid’s services complement Visa’s. “However, a full year has passed since we first announced our intention to acquire Plaid, and the protracted and complex litigation is likely to take considerable time to fully settle,” said Kelly, who was quoted in a press release from the companies.

According to Macan Delrahim, head of the Justice Department’s antitrust division, the cancellation of the deal is in the best interest of consumers. “Plaid and other future innovative fintech companies are free to develop potential alternatives to Visa’s online debit services,” he was quoted as saying in the department’s release. – With more competition, consumers can look forward to lower prices and better service.”

Visa, the operator of the largest U.S. payment system, announced its intent to buy Plaid in mid-January of last year. Since then, the Justice Department has been reviewing the deal.

Visa planned for the deal to close within three to six months.

Plaid, which was valued at about $2.65 billion in a late 2018 funding round, allows users to link bank accounts to financial-tech platforms, including Mint, Acorns, Venmo and Betterment

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