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Visa’s advance into the fintech industry triggers an antitrust investigation by the Ministry of Justice

October 28, 2020

The US Department of Justice or The DoJ recently published an investigation into Visa’s ongoing takeover of fintech company Plaid.

“Today the Department of Justice filed a petition in the US District Court for the Massachusetts District to enforce Bain Company’s compliance with the Civil Investigation Complaint (CID).”The Justice Department said in a public statement on October 27. In essence, US authorities have taken legal action to obtain information from Boston-based consulting giant Bain Company about Visa’s acquisition of Plaid.

“On June 11, 2020, the Bain department issued a CID requiring the company to respond to interrogations and produce documentation, including documents discussing Visa’s pricing strategy and competition with other debit card networks important for analyzing the breakdown of the alleged Impact of the acquisition. The petition alleges that Bain refused to produce these documents and claimed what appears to be a general privilege for almost everyone. “

Payment giant and credit card provider Visa announced on January 13, 2020 that it had acquired Plaid for $ 5.3 billion.. Citizens’ financial lives often require a series of applications or platforms, myriad transactions, and isolated information. Plaid aimed to bridge the separation between these platforms and related information.

Visa’s advance into the fintech industry triggers an antitrust investigation by the Ministry of Justice
Visa’s advance into the fintech industry triggers an antitrust investigation by the Ministry of Justice

“As claimed in the petition, consulting firm Bain withheld important documents required under the CID and exercised unfounded privileges on the documents, thereby obstructing the antitrust investigation.” the Justice Department statement said.

Makan Delrahim, the assistant lawyer for the Antitrust Division, pointed out the importance of such third parties providing relevant information to the authorities. “Too often, third parties try to violate these requirements,” Delrahim said. The action is presented as a liability game keeping Bain in line with regulatory expectations and looking for urgent details related to its investigation.

Earlier this year, after the acquisition was announced, Plaid faced at least two lawsuits. The first came out in June and claimed that Plaid was using customer information for its own benefit. The second legal complaint was filed in July for violating data protection regulations.