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Paul, Weiss won a significant victory for Mastercard when the Southern District of Illinois dismissed a putative antitrust class action against the payment services company and others over Apple Pay’s allegedly anticompetitive structure.

The plaintiffs, a proposed nationwide class of merchants who accepted Apple Pay as a payment method at the physical point-of-sale, claim in their December 2023 lawsuit that Mastercard, Visa and Apple 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 and to certain iPhone hardware. The plaintiffs sought injunctive relief and treble damages.

In their September 2024 motion to dismiss, the defendants argued that the credit card companies’ contracts with Apple regarding Apple Pay, on which the complaint relied, actually contradicted the plaintiffs’ collusion arguments, and that that the merchants’ claims were no more than conclusory assertions.

U.S. District Judge David Dugan agreed with the defendants, finding that the agreements’ express terms, based on the court's review, supported Apple, Visa and Mastercard’s position, and that comparing the provisions of the contracts with the merchants’ allegations “serves only to highlight the implausibility” of the retailers’ antitrust claim. He further found that the transaction fees paid to Apple, which the plaintiffs called “cash bribes,” were in fact fees billed and collected by Mastercard and Visa that were payable to Apple as ordinary compensation for access to the iPhone ecosystem. The merchants have 30 days to file an amended complaint.

The Paul, Weiss team includes litigation partners Nina Kovalenko and Ken Gallo and counsel Donna Ioffredo.