Apple Pay litigation
Mirage Wine & Spirits Inc. v. Apple Inc.
Date: July 10, 2025
Issue: Whether Apple, Visa and Mastercard violated Section 1 of the Sherman Antitrust Act (Sherman Act) by colluding to restrain competition in point-of-sale transaction payment networks.
Case Summary: An Illinois federal court dismissed an antitrust lawsuit accusing Apple, Visa and Mastercard of conspiring to suppress competition in the payments network market and causing merchants to pay inflated transaction fees.
The Sherman Act bars companies from forming monopolies or entering into contracts, combinations, or conspiracies that restrain trade. It promotes fair competition by stopping businesses from using anti-competitive tactics.
A proposed class of merchants alleged Mastercard, Visa and Apple (defendants) colluded to give Apple a cut of the fees from Apple Pay transactions if Apple agreed not to establish its own payment network and to protect Mastercard and Visa’s payment networks by blocking competitors’ access to Apple Wallet. In their motion to dismiss, the defendants argued the credit card companies’ contracts with Apple regarding Apple Pay contradicted the merchants’ collusion arguments, and the merchants’ claims were no more than conclusory assertions.
Judge David W. Dugan of the Southern District of Illinois dismissed the case, determining the agreements’ express terms supported defendants’ position, and comparing the provisions of the contracts with the merchants’ allegations “serves only to highlight the implausibility” of the retailers’ antitrust claim. Most antitrust claims follow the rule of reason, which requires showing anticompetitive effects in a specific geographic market. But the retailers relied on the per se rule, which applies only to conduct so plainly anticompetitive that no further analysis is needed.
According to Judge Dugan, the contracts did not qualify as per se unlawful horizontal market allocation. The contracts showed Apple did not agree to restrict payment network development, block bank-to-bank transfers, or deny access to Apple Wallet or Near Field Communications technology. In addition, the transaction fees paid to Apple, which the plaintiffs called “cash bribes,” were fees billed and collected by Mastercard and Visa that were payable to Apple as ordinary compensation for access to the iPhone ecosystem.
The court also rejected the retailers’ circumstantial allegations, finding they could not salvage the Section 1 claims. While the retailers advanced several claims about the defendants’ market power, dominance, and lack of competition, the court found those allegations too speculative and conclusory.
Bottom Line: The lawsuit was dismissed without prejudice, allowing the retailers to amend their class action complaint within 30 days.
Documents: Order
