As technology titans in the United States capture a larger part of their industries and beyond, regulators and governments have become increasingly concerned about their extensive power and influence.
Indeed, Facebook, Twitter and Google’s parent company Alphabet all appeared before a Congressional antitrust hearing in July.
The primary concern of the government is that these companies use their authority to stifle competition and manipulate users to maintain their leading position in the marketplace.
The latest in a series of ongoing antitrust charges and investigations on corporate giants is the one being considered by the U.S. Department of Justice against Visa. The DOJ said in a public statement that it was investigating the payments giant acquisition of financial services company Plaid.
The statement accuses Bain & Company, Visa’s management and consulting partner, of not complying with the department’s Civil Investigative Demand and withholding important documents about the acquisition. The information requested from the company is considered necessary for the department’s ability to analyze the fairness of the transaction and its impact on the existing competition. The DOJ seemingly fears that Visa could have gone against antitrust laws to keep its competition in check.
Despite the fiasco, the payments giant seems to be spreading its territory not only across the traditional financial landscape but also in crypto payments. Visa cards processed almost $2.2 trillion worth of transactions in Q4 2020, leaving behind the second-largest payment processor, Mastercard, by a margin of more than $1.25 trillion. Even in the cryptocurrency space, the company has gained strong grounds and powers some of the most famous cryptocurrency cards.
Adding to Visa’s already extensive reach in the cryptocurrency space, the San Francisco-based crypto cryptocurrency exchange Coinbase announced plans to roll out a Visa-powered cryptocurrency debit card in the United States. The card has been available in the United Kingdom and European Union since 2019. Early next year, Coinbase will also start delivering its cards to people from all U.S. states except Hawaii.
According to Coinbase, the card will support stablecoins and other cryptocurrencies supported on its platform. Users will be able to make payments or withdraw money using their Visa-powered crypto debit cards at any portal that supports Visa cards.
Crypto credit and debit cards certainly make crypto payments more convenient. And the integration of cryptocurrencies to PayPal is also another major boost to cryptocurrency adoption. However, the expansion of these companies further into the financial technology space may become a concern for the U.S. government. While these companies’ failure to comply with antitrust laws has already been a major trouble for the government, their slow but successful growth into the decentralized financial world may be seen as even bigger trouble.
Regulatory scrutiny toward Facebook’s cryptocurrency project Libra is a fitting example of how wary the government is against centralized and private cryptocurrency projects that have the potential to reach a wide user base.