The US Department of Justice (DoJ) has filed a civil antitrust lawsuit to stop Visa Inc.’s $5.3 billion acquisition of financial services company Plaid Inc.
Visa is a monopolist in online debit services, charging consumers and merchants billions of dollars in fees each year to process online payments, DoJ officials claimed on Thursday, adding that Plaid, a successful fintech firm, is developing a payments platform that would challenge Visa’s monopoly.
“American consumers and business owners increasingly buy and sell goods and services online, and Visa — a monopolist in online debit services – has extracted billions of dollars from those transactions,” Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division said in a statement.
“Now, Visa is attempting to acquire Plaid, a nascent competitor developing a disruptive, lower-cost option for online debit payments. If allowed to proceed, the acquisition would deprive American merchants and consumers of this innovative alternative to Visa and increase entry barriers for future innovators.”
According to the complaint, Plaid powers some of the most innovative fintech apps. Plaid’s technology allows developers to plug into consumers’ various financial accounts, with consumer permission, to aggregate spending data, look up balances, and verify other personal financial data.
Headquartered in San Francisco, California, Plaid connects to 200 million consumer bank accounts and 11,000 US banks.
The complaint alleges that Visa’s CEO viewed the acquisition as an “insurance policy” to protect against a “threat to our important US debit business.”
Visa’s CEO justified the deal to Visa’s Board of Directors as a “strategic, not financial” move, and noted that in part because “our US debit business (is) critical and we must always do what it takes to protect this business.”
Unless acquired, Visa feared that Plaid “on their own or owned by a competitor (was) going to create some threat” with a “potential downside risk of $300-500M in our US debit business” by 2024.
If Plaid remained free to develop its competing payment platform, then “Visa may be forced to accept lower margins or not have a competitive offering.”
In response, a Visa spokesperson told ZDNet that “Visa strongly disagrees with the DOJ, whose attempt to block Visa’s acquisition of Plaid is legally flawed and contradicted by the facts.”
“This action reflects a lack of understanding of Plaid’s business and the highly competitive payments landscape in which Visa operates,” the spokesperson was quoted as saying.
India’s Nov exports rise over 26%, imports over 57%
India’s merchandise exports in November rose to $29.88 billion, higher by 26.49 per cent on a year-on-year basis, preliminary data showed on Wednesday.
Exports in November 2020 stood at $23.62 billion.
According to the data furnished by the Ministry of Commerce and Industry, last month’s exports rose by 15.93 per cent over November 2019.
“Value of non-petroleum exports in November 2021 was $26.06 billion, registering a positive growth of 18.1 per cent over non-petroleum exports of $22.06 billion in November 2020 and a positive growth of 18.69 per cent over non-petroleum exports of $21.95 billion in November 2019.”
The value of non-petroleum and non-gems and jewellery exports rose to $23.66 billion, registering a positive growth of 22.16 per cent over November 2020.
As per the data, India’s merchandise imports last month increased by 57.18 per cent to $53.15 billion over $33.81 billion in November 2020 and 37.96 per cent over $38.52 billion reported for the corresponding month of 2019.
“Value of non-petroleum imports was $38.47 billion in November 2021 with a positive growth of 39.9 per cent over non-petroleum imports of $27.5 billion in November 2020 and a positive growth of 40.12 per cent over non-petroleum imports of $27.45 billion in November 2019.”
“Value of non-oil, non-GJ (gold, silver & Precious metals) imports was $32.02 billion in November 2021 with a positive growth of 41.53 per cent over non-oil and non-GJ imports of $22.63 billion in November 2020 and a positive growth of 42.72 per cent over non-oil and non-GJ imports of $22.44 billion in November 2019.”
Consequently, India’s trade deficit last month widened by 128.30 per cent YoY to $23.27 billion from $10.19 billion while it increased by 82.48 per cent when compared to $12.75 billion reported for November 2019.
Fuel prices remain static barring Delhi
Barring Delhi, the prices of diesel and petrol remained unchanged across major Indian cities on Thursday.
Accordingly, diesel and petrol prices in Delhi stood at Rs 86.67 per litre and Rs 95.41 per litre, respectively.
Notably, prices of petrol in Delhi had been static at Rs 103.97 per litre since the past one month.
Prices have fallen in Delhi as it reduced the value added tax on the fuel from 30 per cent to 19.40 per cent. This decision was taken during a Cabinet meeting chaired by Chief Minister Arvind Kejriwal on Wednesday.
In the financial capital Mumbai, petrol and diesel prices remained unchanged at Rs 109.98 and Rs 94.14 respectively.
Prices also remained static in Kolkata at Rs 104.67 and Rs 89.79 respectively.
In Chennai too, the prices of the two auto fuels remained constant at Rs 101.40 and Rs 91.43 respectively.
Across the country as well, the prices largely remained unchanged on Thursday, but the retail rates varied depending on the level of local taxes.
Equity indices extend gains, Power Grid top gainer
The 30-scrip Sensitive Index (Sensex) extended gains from the previous session in early trade on Thursday.
At 9.30 a.m., the S&P BSE Sensex traded at 57,992 points, up 0.5 per cent.
It opened at 57,781 points from the previous close of 57,684 points.
Till now it touched a low of 57,680 points.
Besides, the broader 50-scrip Nifty at the National Stock Exchange (NSE) opened at 17,183 points after closing at 17,166 on Wednesday.
It traded at 17,264 points, up 0.6 per cent during the early-morning trade session.
Power Grid, Adani Green, BPCL, Mahindra and Mahindra, and IOCL were some of the top gainers during the early trade, the exchange data showed.
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