The question, “Do you honestly think you’re going to replace this?” should be displayed prominently at the Department of Justice’s (DOJ) antitrust division. This question was originally directed at Kimbal Musk, brother of Elon Musk, during the early internet days. The president of the Toronto Star was mockingly asking Musk if his company, Zip2, could compete with the Yellow Pages.
This question highlights a common pattern in business. Almost every significant advancement is often met with skepticism and questions about its potential to succeed. If the future were clear, we would already be living in it. Few businesses willingly let a competitor bring a sure thing to market.
This context is crucial as the DOJ investigates Visa for alleged antitrust violations, claiming the company plans to use its market power to undermine a rival technology firm. Such assumptions from the DOJ are surprising.
The real question is, which “rival technology company” does the DOJ believe Visa intends to eliminate in the debit card market? If you, the reader, or the DOJ have an answer, please reach out. Knowing the competitor Visa aims to defeat could be incredibly valuable—potentially worth billions. In a rapidly growing U.S. economy, insights into upcoming rivals in the payments sector could attract significant investment.
Unlike the DOJ, investors are uncertain about the future of payment methods. They know that, due to ongoing progress in the U.S., consumers will continue to buy more products and services in various ways.
This uncertainty explains why Visa is eager to learn what the DOJ claims to know. Visa would love to identify those innovators who could potentially reshape the payment landscape, as such insights could lead to lucrative investments.
Visa is focused on maintaining its market share in a constantly evolving environment. This space is populated by new entrants like PayPal, Square, Venmo, Zelle, Apple Pay, Google Pay, and various cryptocurrency ventures. If Visa is allegedly seeking to eliminate a rival, who exactly is that competitor?
The situation is further complicated by the emergence of new players in the market. Visa’s significant profits attract fresh competition, which aims to capture market share from established leaders. The challenge lies in identifying which companies will emerge as true competitors; many are either too small to matter now or haven’t even launched yet.
This brings us back to the original question posed to Kimbal Musk. The DOJ can be likened to the Toronto Star, imagining Visa has an unassailable position in its thriving business. If only that were the case. The DOJ’s lawsuit is likely to become outdated, much like the question posed to Musk in the 1990s.
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