A federal judge has tossed out a lawsuit accusing Apple, Visa, and Mastercard of colluding to keep credit and debit card transaction fees high, but merchants have 30 days to file an amended complaint. The case, originally brought by Mirage Wine & Spirits and others in 2023, claimed the companies made backroom deals that blocked Apple from launching its own payment network.
According to the lawsuit, Visa and Mastercard allegedly paid Apple hundreds of millions of dollars a year, framed as a “bribe,” to stay out of the competition. In return, Apple received a slice of every U.S. transaction made through Apple Pay: 0.15 percent on credit transactions and half a cent on debit transactions. Plaintiffs argued these arrangements propped up Visa and Mastercard’s dominance and forced merchants to absorb inflated processing fees.
Judge Calls Allegations Speculative
U.S. District Judge David Dugan of Illinois dismissed the case, stating the plaintiffs failed to back up their claims with hard facts. In his opinion, the lawsuit leaned too heavily on “a slew of circumstantial allegations” and didn’t convincingly show Apple ever intended to launch a rival payment network.
“The complaint completely ignores the difficulties, costs and time, risks, and potential for failure associated with such an endeavor,” Dugan wrote. He concluded the claims were too speculative to prove coordinated, anticompetitive behavior.
Still, Dugan granted plaintiffs 30 days to file a revised version of the lawsuit. If they fail to do so, the case will be dismissed permanently under Federal Rule of Civil Procedure 41(b).
Apple Pay, Fees, and the Alleged ‘Bribe’
Launched in 2014, Apple Pay allows iPhone users to store and use payment cards without relying on physical plastic. The plaintiffs claim Apple’s deal with Visa and Mastercard wasn’t just about convenience. They say the card networks paid Apple to maintain the status quo and suppress any new competitor in the payments infrastructure market.
As reported by Reuters, Visa and Mastercard disputed the claims, saying Apple retained the right to compete under existing agreements. Apple argued the lawsuit failed to demonstrate any intention to challenge Visa and Mastercard’s role in the market. All three firms denied any wrongdoing.
The case is Mirage Wine & Spirits Inc et al v. Apple et al, U.S. District Court for the Southern District of Illinois, No. 3:23-cv-03942-DWD.
