I disagree with the optics of many that there will be severe antitrust concerns over the deal to the point where it can't be completed.

Visa/Mastercard aren't going to say squat because right now, other than the Credit Card Competition Act sitting in the corner (where Discover and Amex are viable second networks if it said bill ever managed to receive the political popularity to pass), they're quiet. Trying to make any opposition to the merger for them would invite unwanted scrutiny that the "duopoly" of Visa/MC are trying to prevent a competitor from growing.

Cap1 for their part is paying for the network, so they have no incentive to abandon it... they could pursue a dual network strategy (where the cards process on Discover network [or on JCB/China UnionPay/Diner's Club] if available, and Visa or MC if not. This could be done by putting the Visa/MC AID as the global/highest priority application on the chip, and allowing merchant terminals to select (which is basically how ChaseNet works on Chase issued Visa cards).

Assuming Cap1 gets shot down by Visa/MC on the dual network strategy - they could just start converting new or existing cardholders on non-travel oriented cards to the Discover network. They control the interchange, they don't have to pay out to another network. Additionally, for the products where Discover's reach is not far enough to buck Visa/MC, it gives Cap1 an incredible bargaining chip with those two networks. Perhaps they use the carrot of not converting non-travel Visa/MC cards to Discover to negotiate better overall terms with Visa/MC.

For the regulatory scrutiny part, Cap1 gets to argue increasing that increasing Discover issuance by adding Cap1's new and existing cardholder pool increases the size of a non-Visa/MC network and therefore increases competition on the network level, and (if true, as is imagined) that they intend to grow Discover's global presence that it increases competition on an even larger stage. Cap1 will probably have to and will likely readily agree to conditions that they continue maintaining Discover's network for a minimum period of time.

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Now getting the stars out of my eyes on why I think this would pass: I think it's probably a net-negative for Discover cardholders (including myself). I'm sure the 24/7 US based customer service will disappear. Cap1 is likely to look at Discover's cardholders and credit limits more warily; especially for people with cards on both Discover/Cap1, I wouldn't be surprised to see CLDs at some point when they merge (at least on corporate level) and check their overall risk across the two companies.

I think the biggest one may be that in terms of no file/thin/lower credit score profiles, Discover and Cap1 tend to be good issuers. Removing a competitor from the pool is (in my opinion) detrimental for the overall market...