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Apple, Mastercard, and Visa have managed get a lawsuit dismissed claiming that the three companies conspired to inflate credit and debit card transaction fees paid by merchants.
In December 2023, Mirage Wine & Spirits filed a lawsuit alleging that Apple had made agreements with Visa and Mastercard to not compete against the payment processors. A year and a half later, the lawsuit has been dismissed.
The Wednesday ruling by U.S. District Judge David Durgan for the Southern District of Illinois stops the lawsuit from the retailer and other plaintiffs who joined the action. The reasoning for it was that the retailers failed to provide enough evidence to prove their claims, reports Reuters.
Judge Durgan writes that the plaintiffs provided only a “slew of circumstantial allegations” in its suit. The ruling doesn’t entirely stop the lawsuit, as the retailers are allowed to update the claims to make them stronger, and to refile the suit.
Neither the plaintiffs, Mastercard, Visa, nor Apple provided a comment following the ruling.
Card cost conspiracy
The complaint from 2023 alleged that Apple had made a deal with Visa and Mastercard, so that the two payment processors pay Apple for part of the transaction fees that went through Apple’s “Mobile Wallet Service.” In effect, the deal was that Apple would be getting a “very large and ongoing cash bribe” for Apple Pay transactions.
With seemingly no competition between the three companies, the complaint reasoned that there was no urgency for any of the trio to improve their services to gain more custom. This could have resulted in acts such as reducing merchant fees for card transactions.
If there wasn’t a market-allocation agreement, the suit says Apple or another third-party could’ve entered the market and applied more downward pressure on the network fees.
Apple’s hardware was also attacked by the suit, as Apple would “protect their market division from competition” by blocking third parties from accessing Apple’s NFC hardware.
Without an agreement in place, the lawsuit believes Apple would’ve had more of an incentive to manage its own payment network. Complete with bank transfer and merchant fees through Apple Wallet that would’ve been “highly profitable” to Apple while also below fees charged by Visa and Mastercard.
Apple may have also had more incentive to open up its NFC hardware to third parties at the time.
