Warren Calls on DOJ To Block Anticompetitive Capital One-Discover Merger That Would Raise Prices and Fees on Consumers and Small Businesses
Washington, DC – Ahead of the finalization of the Capital One-Discover merger that would create the nation’s largest credit card company, U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, wrote to Department of Justice (DOJ) Assistant Attorney General Abigail Slater calling on the Antitrust Division to step in and block the anticompetitive transaction.
“The deal appears to be an illegal transaction under federal antitrust law because it would substantially lessen competition in critical credit card markets, increasing prices and eroding service for hardworking Americans and small businesses. In your first antitrust address as Assistant Attorney General, you warned against consolidation that resulted in ‘too big to fail banks’ and culminated with the 2008 financial crisis. This transaction will reveal whether you back your words with action,” wrote Ranking Member Warren.
The Ranking Member detailed how this merger would not solve the payment network duopoly problem, but rather lay the groundwork for more illegal coordination: “Visa and Mastercard, which have enjoyed a duopoly, have a long history of alleged coordination, resulting in higher fees for customers and merchants. Capital One has stated that it will move some, but not all, of its credit card volume to the Discover network, meaning it will be negotiating its interchange fees as a credit card issuer with Visa and Mastercard, while separately setting interchange fees on its own network. That is a recipe for coordination among the three networks.”
Ranking Member Warren concluded by calling on the DOJ to act: “I urge the DOJ to immediately sue to block the acquisition under Section 7 of the Clayton Act. The DOJ must step in to stop this deal and preserve competition for American consumers and small businesses.”
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