• US District Court Dismisses Antitrust Claims In Connection With Payment Network Market

  07/22/2025

  On July 10, 2025, US District Judge David Dugan of the Southern District of Illinois (S.D. Ill.) granted without prejudice motions of Apple and two payment network providers to dismiss antitrust claims by a putative class of merchants who use Apple Pay.  Mirage Wine + Spirits, Inc. v. Apple Inc. et al., No. 3:23-cv-3942, ECF 178 (S.D. Ill. Jul 9, 2025).  The Court found that plaintiffs’ allegations were too speculative to support their theory of injury, and as such, failed to plead antitrust standing.

  Plaintiffs allege that the payment network providers have maintained an effective duopoly over the U.S. market for Point-of-Sale (POS) Payment Card Network Services since the 1960s.  As a consequence of this dominance, plaintiffs allege the payment network providers impose inflated fees for merchants to use defendants’ payment networks.  According to plaintiffs, Apple, with the development of Apple Pay, was positioned to disrupt the payment network providers’ purported dominance, but instead entered anticompetitive agreements with these defendants in exchange for a share of these defendants’ supracompetitive fees.

  Plaintiffs point specifically to Apple’s payment platform agreements (PPAs), which provide Apple a share of transaction fees for purchases made with Apple Pay.  Plaintiffs characterize this fee sharing as “cash bribes” paid by the payment network providers to Apple to facilitate a per se illegal market allocation that enables the payment network providers to limit competition and maintain supracompetitive transaction fees.

  In its decision, the Court explained that to survive a motion to dismiss, plaintiffs must plausibly allege an injury arising from a violation of the antitrust laws—in this case—an agreement that unreasonably restrains trade.  Here, the Court was persuaded by defendants’ argument that the PPAs were non-exclusive and did not unreasonably restrict competition.  Indeed, the Court found that, “allegations of per se horizontal market allocation agreements mischaracterize, and are actually contradicted by, the PPAs.”  For example, plaintiffs’ allegations that defendants offered “cash bribes” to Apple were contradicted by the PPAs’ express terms, which provide that fees are paid by non-defendant card issuers, not by the payment network providers. Judge Dugan emphasized that plaintiffs’ theory of a but-for world wherein Apple created a competing payment network that drove down merchant fees—was ultimately speculative and unsupported by factual allegations given the “monumental task” of disintermediating the payment network providers.

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Links & Downloads

• Mirage Wine + Spirits, Inc. v. Apple Inc. et al.