Visa, Mastercard, Apple swipe away lawsuit – for now

In a significant development for the payments industry, Apple, Visa, and Mastercard have secured the dismissal of an antitrust lawsuit. A class of merchants filed this suit in the U.S. District Court for the Southern District of Illinois. The lawsuit accused these companies of conspiring to suppress competition in the payments network market. This alleged suppression, they claimed, led to inflated transaction fees for merchants.

Judge Rules on Evidence

U.S. District Judge David Dugan issued his ruling on Wednesday, July 9, 2025. He found that the plaintiffs, led by beverage retailer Mirage Wine & Spirits, lacked sufficient evidence. Their claim was that Apple illegally declined to launch a competing payment network. This network would have rivaled Visa and Mastercard. The lawsuit, initially filed in December 2023, specifically targeted Apple’s iPhone. It alleged that Apple restricted its Near Field Communication (NFC)-based “tap-to-pay” feature for third-party developers. According to the plaintiffs, this restriction further solidified Visa and Mastercard’s market dominance.

Judge Dugan described the merchants’ allegations as merely “a slew of circumstantial allegations.” Despite dismissing the current complaint, he granted the plaintiffs permission to amend their lawsuit. They have 30 days to strengthen their claims and refile. This decision leaves the door open for a potential continuation of this legal challenge.

Allegations of “Cash Bribe” and Inflated Fees

The lawsuit represented thousands of merchants. Its core argument revolved around the assertion that Visa and Mastercard paid Apple a “very large and ongoing cash bribe.” This allegedly amounted to hundreds of millions of dollars annually. The purpose, they claimed, was to deter Apple from entering the payments network market as a direct competitor. The plaintiffs further alleged that these payments constituted approximately 0.15% of all U.S. credit transactions and US$0.005 per U.S. debit transaction processed through Apple Pay on the Visa and Mastercard networks. This alleged arrangement, according to the merchants, directly contributed to higher transaction fees.

Defendants Deny Wrongdoing

Both Visa and Mastercard strongly denied making such payments to Apple. They argued these fees were part of ordinary business practices. Furthermore, they maintained that their agreements with Apple explicitly preserved Apple’s right to compete in the payments network space.

Apple, for its part, asserted that the complaint lacked evidence. It found no concrete plans by the company to enter the payments network market. Thus, there was no intent to directly compete with Visa or Mastercard. Judge Dugan agreed with this sentiment in his decision. He stated that the merchants’ allegations “completely ignore the difficulties, costs and time, risks, and potential for failure associated with such an endeavor” as Apple launching a new payments network.

Broader Context of Payments Litigation

This case is part of a larger trend. Payment card antitrust litigation has a decades-long history in the U.S. This history includes massive settlements, such as a $5.54 billion agreement in 2019. This was one of the largest antitrust class action settlements ever. Merchants have consistently challenged interchange fees, which can reach 3% per transaction. They also oppose restrictive rules like “Honor All Cards.” These rules limit their ability to choose lower-cost payment options. This current dismissal highlights the difficulty of proving collusion in the payment industry. It requires substantial evidence of explicit agreements, not just circumstantial market behaviors.

The idea that Apple, a major market player, was allegedly “paid off” to avoid competition also aligns with broader allegations from the U.S. Justice Department. Last year, the DOJ accused Visa of operating an illegal monopoly in the debit card market. It specifically cited Apple, PayPal Holdings, and Square as potential network competitors. The DOJ claimed these companies were allegedly impacted by incentive agreements with Visa. A federal judge in New York recently denied Visa’s request to dismiss that U.S. lawsuit. This indicates ongoing regulatory scrutiny in the broader payments ecosystem.

Apple Pay and Network Infrastructure

Apple launched its Apple Pay feature in 2014. This mobile payment service allows iPhone users to store payment card information. It facilitates purchases at accepting businesses. However, the dismissed lawsuit focused not on Apple Pay as a consumer payment method. Instead, it targeted the broader payments network infrastructure. It also addressed alleged anticompetitive agreements impacting merchant fees.

This dismissal marks a temporary victory for Apple, Visa, and Mastercard. It is a legal battle highlighting ongoing scrutiny of competition in digital payments. While the initial complaint has been set aside, the plaintiffs can amend and refile. This ensures that the debate over competition and transparency in payment fees will likely continue.