MCLEAN, Va.— Capital One and Discover Financial have been hit with a lawsuit that alleges their proposed $35 billion merger would reduce competition, drive up prices and should be stopped.
The proposed class action, filed in Alexandria, Va., federal court by two Capital One customers in Vermont and New Jersey, said the deal would violate U.S. antitrust law, according to Reuters, which noted the proposed merger would create the biggest U.S. credit card issuer by balance and sixth-largest U.S. bank by assets.
“Capital One and Discover announced their merger plan in February, swiftly drawing calls by some members of Congress for U.S. regulators to block the deal and raising the prospect of months-long antitrust scrutiny,” noted Reuters.
Companies Defend Proposal
The two companies have defended their proposal, saying it would drive competition in markets for credit cards and for payment processing.
Capital One in a statement said it was common for consumers to file lawsuits over proposed mergers and that the case in Virginia "has no merit,” Reuters added.