The proceedings launched by the Department of Justice (DOJ) against Visa Inc over its planned $5.3 billion acquisition of Plaid Inc continue at the California Northern District Court. On Friday, December 11, 2020, the parties submitted a Joint Case Management Statement, which outlines some issues that the Court is asked to resolve.

One of these issues concerns documents that Visa allegedly withheld.

As part of its pre-complaint Investigation, the United States served Visa with compulsory process. In response, the DOJ says, Visa withheld certain responsive documents related to work performed by a third-party consultant, Bain & Company, concerning Visa’s pricing strategy and competition in the markets on the grounds of work product and attorney-client privilege. The United States disagrees that these documents are privileged or subject to work-product protection, and also believes that any privileges have been waived.

The so-called “Bain project” focused on the development of new pricing and competition practices, including for Visa’s debit business. DOJ says that Visa also instructed Bain to withhold numerous documents on its behalf.

The US authorities note that documents relating to Visa’s pricing and competition strategy involving the products at issue in this lawsuit are relevant to determining whether Visa is a monopolist, the likely impact of the proposed acquisition on pricing, and whether its consummation will tend to increase Visa’s market power.

The DOJ requests that the Court permit the United States to move to compel production of the Bain project documents responsive to United States’ First Request for Production immediately and order expedited briefing on the narrow issue of whether these documents may be legally withheld or redacted for privilege or as attorney work product.

Visa maintains that the documents sought are protected by the attorney-client privilege and/or work product protections and therefore were properly withheld.

Early in November 2020, the DOJ filed a civil antitrust lawsuit that seeks to stop Visa Inc.’s $5.3 billion acquisition of Plaid Inc.

The DOJ’s complaint alleges that Visa’s CEO viewed the acquisition as an “insurance policy” to protect against a “threat to our important US debit business.” This acquisition is the second-largest in Visa’s history, with an extraordinary price tag of $5.3 billion. 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.”

The complaint alleges that Visa has dominated online debit for years and has protected its monopoly with exclusionary tactics that have prevented rivals, including Mastercard, from expanding or entering. The lawsuit alleges that Visa’s proposed acquisition of Plaid is a violation of both Section 2 of the Sherman Act and Section 7 of the Clayton Act.