Visa CEO Alfred Kelly speaks at the Boston College Executive Club luncheon on September 27, 2018.
Brian Snyder | Reuters
Visa has completed its acquisition efforts of the new Silicon Valley Plaid company about two months after the Justice Department filed an antitrust lawsuit alleging it would limit competition in the payments industry.
The company said the decision to end the merger was mutual.
About a year ago, on January 13, 2020, Visa announced that it planned to acquire Plaid in a deal worth $ 5.3 billion, about double the start-up’s latest private valuation. The company’s API software, often referred to as “plumbing” behind fintech technology companies, allows emerging companies to connect to users ’bank accounts. The company says it integrates with more than 11,000 banks.
Plaid CEO Zach Perret said in a statement that the company will work with Visa as an investor and partner in the future.
The deal crashed late last year after the Justice Department noted that the acquisition of Visa could eliminate a nascent competitive threat. The DOJ cited the description of Visa CEO Al Kelly’s agreement as an “insurance policy” to neutralize a “threat to our major debit business in the United States.”
The department argued that at the time there was potential for the deal to expand Visa’s “monopoly” on debit transactions, adding that “it should be stopped.”
The DOJ said Tuesday in a statement that ending the merger was “a victory for American consumers and small businesses.”
The lawsuit symbolized a step that many technical critics say the Federal Trade Commission should have taken back when it approved Facebook’s Instagram acquisitions in 2012 and WhatsApp in 2014.
Now, these mergers are back into public discussion. Late last year, the FTC and several states filed antitrust lawsuits against Facebook, alleging that it used its market power to crush competitors before becoming true rivals of the Facebook empire. The lawsuits suggest remedies that could include Facebook’s need to divert these two businesses.
– CNBC’s Kate Rooney and Lauren Feiner contributed to this report.
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