The US Department of Justice has filed an antitrust complaint against Visa’s proposed multi-billion dollar takeover of financial technology company Plaid. The US government fears that with the purchase Visa would neutralize an emerging major competitor. As a result, Visa illegally gains a monopoly position, which would lead to higher prices, less innovation and higher entry barriers for similar services, the Wall Street Journal quotes from the Ministry’s statement.

Billion dollar takeover planned Visa had announced in January that it would take over Plaid for 5.3 billion dollars (4.7 billion euros) . The takeover was supposed to be completed within three to six months, but that didn’t work out. The Wall Street Journal continues to report that Visa is now brusquely rejecting the objection by the US Department of Justice. The lawsuit is “legally flawed and is counteracted by the facts”. The combination of Visa and Plaid would bring substantial benefits to consumers. The plan will be vigorously defended. Visa has already invested in Plaid as a venture capitalist, so it already holds a stake.

Plaid links various payment apps with bank accounts and thus provides the infrastructure for the in the USA popular service Venmo. At some point, this could enable consumers to transfer payments directly from bank accounts to merchants, and it would undermine Visa’s business, according to the US newspaper. Visa is primarily active in the licensing business. The company issues licenses to banks to issue payment cards, as well as licenses for the settlement of transactions with shops and other companies.

(mho)