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Consumer Reports statement in response to the Department of Justice’s antitrust lawsuit against Visa and Plaid


Washington, DC—Consumer Reports released the following statements in response to the Department of Justice’s lawsuit against Visa for its proposed plan to acquire Plaid for $5.3 billion. 

Sumit Sharma, senior researcher for tech competition said, “We welcome the Justice Department’s suit to block Visa’s acquisition of an emerging competitor challenging Visa. With the rise of e-commerce and remote payments, there is no doubt that consumers would benefit from further innovations and competition that reduce transaction costs and introduce new payment mechanisms.

“We also hope that this suit against Visa is a sign that the DOJ will step up its enforcement action against acquisitions by dominant online platforms like Facebook and Google that also have a history of acquiring up-and-coming challengers to further entrench their dominance while benefiting from substantial network effects.

“As the DOJ states in its complaint, ‘New challengers to Visa’s monopoly would thus face a chicken-and-egg quandary, needing connections with millions of consumers to attract thousands of merchants and needing thousands of merchants to attract millions of consumers.’ Replace ‘merchants’ with ‘advertisers’ and the statement is equally true for innovative challengers to Google and Facebook. Facebook additionally benefits from the largest social graph in the US. Any acquisitions by these dominant platforms must face robust scrutiny and challenge to protect competition in online marketplaces.”

George Slover, senior policy counsel, added, “For the marketplace to work for consumers, new competitors need a fair opportunity to enter the marketplace and offer consumers alternatives. Robust competition gives consumers the leverage of choice, so businesses can’t say ‘take it or leave it,’ but have to pay attention to what consumers want, and work to provide the best products and services at the most affordable prices.”

The Department of Justice should also investigate the market power gained by the amalgamation of financial and personal data as a result of the proposed merger, and whether this market power will lead to more invasive data collection practices and erosion of consumer privacy. Plaid is currently the subject of a class action lawsuit alleging violation of data privacy laws, and a lawsuit alleging that Plaid misleads consumers about its role in the data collection process. CR’s own research raises questions about whether the user consent that Plaid claims to have to collect and share consumer data is informed or meaningful.

Contact: Cyrus Rassool, cyrus.rassool@consumer.org