Mirage Wine + Spirits, Inc. v. Apple Inc.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF ILLINOIS

MIRAGE WINE + SPIRIT’S, INC., d/b/a

MIRAGE WINE & SPIRITS, MARTLET

MEADOWS FARM, LLC, d/b/a

DOUBLE BUBBLE CAR WASH,

PARCELLE LLC, d/b/a PARCELLE

ORGANICS, FOGGY BOTTOM BOYS,

LLC, and FAMILIA COFFEE,

Individually and on Behalf of All

Others Similarly Situated,

Case No. 3:23-cv-3942-DWD

Plaintiffs,

v.

APPLE INC., VISA INC., and

MASTERCARD INCORPORATED,

Defendants.

MEMORANDUM & ORDER

Before the Court is the Motion to Dismiss of Defendants Visa Inc. (“Visa”) and

Mastercard Incorporated (“Mastercard”). (Doc. 115; Sealed Doc. 116). Also before the

Court is the Motion to Dismiss of Defendant Apple Inc. (“Apple”). (Doc. 119; Sealed Doc.

120). Plaintiffs filed a combined Response to, and Defendants filed separate Replies in

Support of, the Motions to Dismiss. (Docs. 158, 160, 161, 175; Sealed Docs. 154, 157, 159,

163). As explained below, the Motions to Dismiss are GRANTED in part and DENIED

in part.1 The Amended Class Action Complaint is DISMISSED without prejudice.

Plaintiffs shall file a Second Amended Class Action Complaint, if any, within 30 days.

1The Motions to Dismiss are denied only to the extent that they request a dismissal with prejudice.

I. BACKGROUND

In an Amended Class Action Complaint, Plaintiffs allege Defendants Visa and

Mastercard have “dominated the U.S. market for Point-of-Sale (‘POS’) Payment Card

Network Services since the 1960s.” (Doc. 101, pgs. 4, 10-14).2 Due to that dominance,

Defendants Visa and Mastercard have “long imposed inflated fees on Merchants for use

of their POS Transaction Payment networks, and U.S. Merchants have paid fees that

significantly exceed fees charged in other jurisdictions.” (Doc. 101, pgs. 4, 40-43).

Defendant Apple, with its iPhone and Apple Pay, allegedly could have disrupted that

dominance and restored competition to the relevant market. (Doc. 101, pgs. 4, 15-20, 31-

34). Defendants Visa and Mastercard “worried that Apple and its iPhone would

disrupt…their longstanding POS Transaction Payment networks by driving down the

lucrative fees…charged [to] Merchants for decades.” (Doc. 101, pgs. 4, 20-21, 31-34).

However, rather than compete in the market with lower fees, Defendant Apple

allegedly agreed with Defendants Visa and Mastercard to allocate the market. (Doc. 101,

pgs. 4-5, 21-31). More specifically, Defendant Apple allegedly agreed to not establish its

own payment network, to prevent Apple Pay users from transferring funds from their

bank accounts directly to merchants’ bank accounts, and to protect Defendants Visa and

Mastercard’s payment networks by blocking competitors’ access to Apple Wallet and its

Near Field Communication (“NFC”) technology.3 (Doc. 101, pgs. 4-5, 21-31). In exchange,

2Each Plaintiff used Apple Pay as a method of purchasing network services from Defendants Visa

and Mastercard at the physical POS. (Doc. 101, pgs. 7-8).

3The NFC technology is described as “a wireless technology that enables the communication

between devices over short distances.” (Sealed Docs. 116-1, pg. 7; 116-2, pg. 7; 120-1, pg. 7; 120-2, pg. 7).

Defendants allegedly agreed that Apple Pay transactions would run through Defendants

Visa and Mastercard’s payment networks and Defendant Apple would receive portions

of the transaction fees, or “cash bribes,” generated by the payment networks. (Doc. 101,

pgs. 4-5, 22-31). Plaintiffs describe the fees, or “cash bribes,” as follows: “the Entrenched

Networks arranged for Apple to be paid 15 basis points (i.e., 0.15%) on the value of all

U.S. credit transactions and 0.5 cents ($0.005) on all U.S. debit transactions initiated with

Apple Pay at the POS on their respective networks.” (Doc. 101, pgs. 5, 22). Plaintiffs allege

the “payments initially amounted to hundreds of millions of dollars each year and are

now worth billions of dollars each year.” (Doc. 101, pgs. 5, 22).

As a result of Defendants’ unlawful actions, Plaintiffs allegedly “sustained direct

injury to their businesses or property,” i.e., they “paid and continue to pay artificially

inflated fees directly to the Entrenched Networks (Apple’s conspirators) for using their

POS Transaction Payment networks, and Apple has received a portion of those fees as a

bribe.” (Doc. 101, pg. 43). They claim per se violations of the Sherman Act (15 U.S.C. § 1)

and the Clayton Act (15 U.S.C. §§ 15 and 26) on behalf of themselves and a class

“consisting of Merchants in the United States that used Apple Pay as a method of

purchasing Network Services from Visa and Mastercard at the physical POS from

December 14, 2019, to the present…and who did not accept Visa or Mastercard Payment

Cards…at any time between January 1, 2004 and January 25, 2019, and have not otherwise

released the claims asserted in the[] [Amended] Complaint.” (Doc. 101, pgs. 5-7, 31, 46-

51). Plaintiffs seek monetary relief stemming from the inflated fees that were paid due to

Defendants’ “unlawful agreement to restrain trade,” including treble damages, costs, and

attorney fees. (Doc. 101, pg. 6). Plaintiffs also request injunctive relief. (Doc. 101, pg. 6).

Defendants filed their Motions to Dismiss the Amended Class Action Complaint

under Federal Rule of Civil Procedure 12(b)(6). (Docs. 115 & 119; Sealed Docs. 116 & 120).

The Court addresses the arguments raised in relation to those Motions to Dismiss below.

II. ANALYSIS

A motion to dismiss under Rule 12(b)(6) challenges a complaint for the failure to

state a claim for which relief may be granted. Fed. R. Civ. P. 12(b)(6); Firestone Fin. Corp.

v. Meyer, 796 F.3d 822, 825 (7th Cir. 2015) (quoting Camasta v. Jos. A. Bank Clothiers, Inc.,

761 F.3d 732, 736 (7th Cir. 2014)). To survive such a motion, which tests the sufficiency of

the complaint but not its merits, a plaintiff must allege enough facts to state a facially

plausible claim to relief. Kloss v. Acuant, Inc., 462 F. Supp. 3d 873, 876 (7th Cir. 2020)

(quoting McReynolds v. Merrill Lynch & Co., Inc., 694 F.3d 873, 878 (7th Cir. 2012)); Fosnight

v. Jones, 41 F.4th 916, 921-22 (7th Cir. 2022) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.

544, 570 (2007)). That means the plaintiff must plead enough facts for the Court to draw

reasonable inferences as to liability. Fosnight, 41 F.4th at 922 (quoting Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009)). A complaint need not allege “detailed factual allegations,” but it

must state enough facts to lift the claim above the speculative level. Kloss, 462 F. Supp. 3d

at 876 (citing Twombly, 550 U.S. at 555). “Threadbare recitals” of the elements, supported

by mere conclusions, do not suffice. Trivedi v. Wells Fargo Bank, N.A., 609 F. Supp. 3d 628,

631 (N.D. Ill. 2022) (quoting Iqbal, 556 U.S. at 678). When ruling, the Court accepts all well-

pled facts as true and draws all reasonable inferences for the plaintiff. Id. (quoting Tamayo

v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008)); accord Kloss, 462 F. Supp. 3d at 874-75.

The documents attached to a motion to dismiss may be considered by the Court if

they are referenced in the plaintiff’s complaint and are central to its claims, all of which

is true regarding Plaintiffs’ Amended Class Action Complaint and Defendants’ Payment

Platform Agreements (“PPAs”) here. Dean v. Nat’l Prod. Workers Union Severance Tr. Plan,

46 F.4th 535, 543 (7th Cir. 2022) (citing 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th

Cir. 2002)); (Sealed Docs. 116-1, 116-2, 120-1, 120-2). And, when an exhibit attached to or

referenced in the complaint “incontrovertibly contradicts” the plaintiff’s allegations, it is

“the exhibit [that] ordinarily controls, even when considering a motion to dismiss.”

See Esco v. City of Chicago, 107 F.4th 673, 678-79 (7th Cir. 2024) (quoting Bogie v. Rosenberg,

705 F.3d 603, 609 (7th Cir. 2013)) (cleaned up). The Court is not required to accept the

plaintiff’s allegations on the effect of the exhibit; instead, it can independently examine

and form its own conclusions about the proper construction and meaning of that exhibit.

Rosenblum v. Travelbyus.com Ltd., 299 F.3d 657, 661 (7th Cir. 2002) (citing 5 Wright &

Miller, Federal Practice & Procedure: Civil 2d, § 1327 at 766 (1990)).

A. Section 1 of the Sherman Act

and Antitrust Standing

As a substantive matter, the Sherman Act “is designed ‘to protect consumers from

injury that results from diminished competition.’ ” Always Towing & Recovery, Inc. v. City

of Milwaukee, 2 F.4th 695, 703 (7th Cir. 2021) (quoting Agnew v. NCAA, 683 F.3d 328, 334-

35 (7th Cir. 2012)). To that end, § 1 of the Sherman Act provides as follows:

Every contract, combination in the form of trust or otherwise, or conspiracy,

in restraint of trade or commerce among the several States, or with foreign

nations, is declared to be illegal. Every person who shall make any contract

or engage in any combination or conspiracy hereby declared to be illegal

shall be deemed guilty of a felony, and, on conviction thereof, shall be

punished by fine not exceeding $100,000,000 if a corporation, or, if any other

person, $1,000,000, or by imprisonment not exceeding 10 years, or by both

said punishments, in the discretion of the court.

15 U.S.C. § 1.

To succeed on a claim under § 1, a plaintiff must plead and prove: (1) a contract,

combination, or conspiracy; (2) an unreasonable restraint of trade in a relevant market;

and (3) an accompanying injury. Always Towing & Recovery, Inc., 2 F.4th at 703 (quoting

Agnew, 683 F.3d at 335); accord In re Outpatient Med. Ctr. Emp. Antitrust Litig., 630 F. Supp.

3d 968, 983 (N.D. Ill. 2022). The failure to satisfy any one of these elements is fatal to a § 1

claim. Always Towing & Recovery, Inc., 2 F.4th at 704 (quoting Agnew, 683 F.3d at 335).

As to the first element, to survive a Rule 12(b)(6) motion to dismiss, “the existence

of an agreement that violates § 1 of the Sherman Act [must] ‘be pleaded plausible through

allegations of fact.’ ” Id. at 703 (quoting Alarm Detection Sys., Inc. v. Village of Schaumburg,

930 F.3d 812, 827 (7th Cir. 2019)); see also In re Dealer Mgmt. Sys. Antitrust Litig., 313 F.

Supp. 3d 931, 949 (N.D. Ill. 2018) (“Plausibly pleading the first element, an agreement,

requires ‘enough factual matter (taken as true) to suggest that an agreement was made’—

that is, ‘enough fact[s] to raise a reasonable expectation that discovery will reveal

evidence of illegal agreement.’ ”). A plaintiff can do this with two types of allegations:

(1) direct allegations of an agreement, e.g., the admission to a conspiracy; or

(2) circumstantial allegations of an agreement, e.g., facts giving rise to a plausible

inference as to the existence of an agreement. Always Towing & Recovery, Inc., 2 F.4th at

703 (quoting Alarm Detection Sys., Inc., 930 F.3d at 827); accord In re Dealer Mgmt. Sys.

Antitrust Litig., 313 F. Supp. 3d at 949. If the allegations are as consistent with a wide

range of lawful and independent business conduct as they are with an anticompetitive

agreement, then the first element of § 1 is not satisfied. See In re Outpatient Med. Ctr. Emp.

Antitrust Litig., 630 F. Supp. 3d at 984; see also In re Dealer Mgmt. Sys. Antitrust Litig., 313

F. Supp. 3d at 949 (“Mere allegations of ‘parallel conduct,’ without more, do not ‘tend[]

to exclude the possibility of independent action,’ and are therefore insufficient.”).

Similarly, to plead a conspiracy on the first element of a § 1 claim, a plaintiff must

allege each conspirator had a conscious commitment to a common scheme that was

designed to achieve an unlawful objective, i.e., a unity of purpose, a common design and

understanding, or a meeting of the minds in an unlawful arrangement. See In re Outpatient

Med. Ctr. Emp. Antitrust Litig., 630 F. Supp. 3d at 984 (quoting Omnicare, Inc. v.

UnitedHealth Grp., Inc., 629 F.3d 697, 706 (7th Cir. 2011); citing Standard Iron Works v.

ArcelorMittal, 639 F. Supp. 2d 877, 900 (N.D. Ill. 2009)); accord In re Dealer Mgmt. Sys.

Antitrust Litig., 581 F. Supp. 3d 1029, 1047 (N.D. Ill. 2022). Multiple bilateral agreements

can evince a single conspiracy if they are sufficiently interdependent and are executed in

the context of other plus factors that suggest coordination. In re Outpatient Med. Ctr. Emp.

Antitrust Litig., 630 F. Supp. 3d at 985 (quoting In re Nexium (Esomeprazole) Antitrust Litig.,

42 F. Supp. 3d 231, 252 (D. Mass. 2014)); see also In re Turkey Antitrust Litig., 642 F. Supp.

3d 711, 722 (7th Cir. 2022) (“In considering whether sufficient circumstantial evidence of

collusion exists at the pleading stage, the Court asks whether Plaintiffs alleged parallel

conduct and additional factual circumstances or ‘plus factors,’ that are indicative of an

agreement.”). The relevant “plus factors” include the common motive to conspire,

evidence showing parallel acts were against the apparent individual economic self-

interest of the alleged conspirators, and evidence of a high level of interfirm

communications. In re Outpatient Med. Ctr. Emp. Antitrust Litig., 630 F. Supp. 3d at 985

(quoting PharmacyChecker.com, LLC v. Nat’l Ass’n of Bds. of Pharmacy, 530 F. Supp. 3d 301,

334 (S.D.N.Y. 2021)); see also In re Turkey Antitrust Litig., 642 F. Supp. 3d at 722 (“Sufficient

circumstantial evidence may include ‘a mixture of parallel behaviors, details of industry

structure, and industry practices, that facilitate collusion.’ Parallel behaviors include

those which ‘would probably not result from chance, coincidence, independent responses

to common stimuli, or mere interdependence unaided by an advance understanding

among the parties,’ and ‘conduct that indicates the sort of restricted freedom of action

and sense of obligation that one generally associates with agreement.’ ”) (cleaned up).

As to the second element, the Court stresses “every contract is a restraint of trade,

and as [the Supreme Court] ha[s] repeatedly recognized, the Sherman Act was intended

to prohibit only unreasonable restraints of trade.” NCAA v. Bd. of Regents of Univ. of

Oklahoma, 468 U.S. 85, 98 (1984); accord Always Towing & Recovery, Inc., 2 F.4th at 704;

see also In re Outpatient Med. Ctr. Emp. Antitrust Litig., 630 F. Supp. 3d at 984 (noting

Ҥ 1 does not reach independent action that happens to have an anticompetitive effect).

To assess whether an agreement is an unreasonable restraint of trade, the Court “draw[s]

on several analytical frameworks,” including the rule of reason and the per se rule. Always

Towing & Recovery, Inc., 2 F.4th at 704 (citing Agnew, 683 F.3d at 335-37); accord In re

Outpatient Med. Ctr. Emp. Antitrust Litig., 630 F. Supp. 3d at 986.4

Typically, antitrust claims are analyzed under the rule of reason, which requires a

plaintiff to show the agreement has an anticompetitive effect on a market within a

geographic area. In re Outpatient Med. Ctr. Emp. Antitrust Litig., 630 F. Supp. 3d at 986

(citing Agnew, 683 F.3d at 335; U.S. v. Topco Assocs., Inc., 405 U.S. 596, 607 (1972)); accord In

re Delta Dental Antitrust Litig., 484 F. Supp. 3d 627, 633 (N.D. Ill. 2020). Under this rule,

the plaintiff has a threshold burden of defining the precise market, including both its

product and geographic components, in order to show the defendant wields market

power and can produce the anticompetitive effects. See In re Delta Dental Antitrust Litig.,

484 F. Supp. 3d at 639-40 (quoting Agnew, 683 F.3d at 337; citing Brown Shoe Co. v. U.S.,

370 U.S. 294, 324 (1962); U.S. v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 395 (1956));

Vital Pharm., Inc. v. Berlin Packaging LLC, 632 F. Supp. 3d 780, 786 (N.D. Ill. 2022).

However, under the per se rule, which allows the Court to dispense with the other

rules and is specifically invoked by Plaintiffs here, actions are per se violations of § 1 when

their nature and necessary effects are so plainly anticompetitive that it is unnecessary to

analyze their illegality. Always Towing & Recovery, Inc., 2 F.4th at 704 (quoting Tri-Gen Inc.

v. Int’l Union of Operating Eng’rs, Loc. 150, 433 F.3d 1024, 1032 (7th Cir. 2006)); accord In re

Outpatient Med. Ctr. Emp. Antitrust Litig., 630 F. Supp. 3d at 986-87; see also Agnew, 683

F.3d at 336 (“[T]he per se rule…is employed when a practice facially appears to be one

4A third rule, the quick-look rule, is not implicated here. See Agnew, 683 F.3d at 336 (discussing that

rule’s applicability); In re Delta Dental Antitrust Litig., 484 F. Supp. 3d at 633 (same).

that would always or almost always tend to restrict competition and decrease output.

Restraints that would fall under this category are illegal as a matter of law for reasons of

efficiency; in essence, it is simply not worth the effort or resources of a Rule of Reason

analysis when the Court can predict with confidence that the Rule of Reason will

condemn a restraint…. [A] restraint is deemed unreasonable without any inquiry into the

market context in which the restraint operates.”) (cleaned up); (Doc. 101, pgs. 5, 25, 28,

31, 50). When a contract, combination, or conspiracy involves such actions, “an

unreasonable restraint is conclusively presumed because the probability that these

practices are anticompetitive is so high.” Always Towing & Recovery, Inc., 2 F.4th at 704

(quoting Omnicare, Inc., 629 F.3d at 705–06; NCAA, 468 U.S. at 100); see also In re Outpatient

Med. Ctr. Emp. Antitrust Litig., 630 F. Supp. 3d at 986 (“The per se rule is a presumption of

unreasonableness based on business certainty and litigation efficiency. It represents a

longstanding judgment that the prohibited practices by their nature have a substantial

potential for impact on competition…. [A] conclusive presumption of unreasonableness

applies where experience with that particular kind of restraint enables the Court to

predict with confidence that the rule of reason will condemn it.”) (cleaned up).

Usually, it is only horizontal restraints, i.e., restraints imposed pursuant to the

agreement of competitors, that are treated as per se unreasonable. In re Outpatient Med.

Ctr. Emp. Antitrust Litig., 630 F. Supp. 3d at 987 (quoting Ohio v. Am. Express Co., 585 U.S.

529, 540-51 (2018)). For example, it is per se unlawful for competitors, at the same level of

a market structure, to agree to allocate territories, customers, or products for the purpose

of minimizing competition. See id. at 987-88 (citing Leegin Creative Leather Prods., Inc. v.

PSKS, Inc., 551 U.S. 877, 886 (2007); U.S. v. Capitol Serv., Inc., 568 F. Supp. 134, 154 (E.D.

Wis. 1983); U.S. v. Kemp & Assocs., Inc., 907 F.3d 1264, 1273 (10th Cir. 2018); quoting Topco

Assocs., Inc., 405 U.S. at 608); see also City of Rockford v. Mallinckrodt ARD, Inc., 360 F. Supp.

3d 730, 753 (N.D. Ill. 2019) (“Courts use a ‘per se’ test for conduct such as horizontal price

fixing, market allocation, group boycotts, or tying arrangements that are so inherently

anticompetitive, they are considered illegal per se.”); In re Broiler Chicken Antitrust Litig.,

290 F. Supp. 3d 772, 788 (N.D. Ill. 2017) (“As the Seventh Circuit explained,

the Sherman Act does not require sellers to compete; it just forbids their agreeing or

conspiring not to compete. The crucial question, then, is whether the challenged

anticompetitive conduct stems from independent decisions or from an agreement, tacit

or express…. [O]nly agreements not to compete are prohibited by the law.”) (cleaned up).

However, courts must contrast horizontal restraints, which warrant a per se

presumption of unreasonableness, with other types of vertical restraints that are

“imposed by agreement between firms at different levels of distribution.” See Always

Towing & Recovery, Inc., 2 F.4th at 705 (citing Tri-Gen, 433 F.3d at 1032; Texaco Inc. v.

Dagher, 547 U.S. 1, 5 (2006); quoting Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 730

(1988)) (cleaned up). The Supreme Court has found certain types of vertical restraints are

not per se unlawful. Id. (citing Leegin Creative Leather Prods., Inc., 551 U.S. at 885). With that

said, however, the Seventh Circuit has acknowledged it is “cautious about importing

relaxed standards of proof from horizontal agreement cases into vertical agreement cases

because to do so might harm competition and frustrate the very goals that antitrust law

seeks to achieve.” Always Towing & Recovery, Inc., 2 F.4th at 705 (quoting Republic Tobacco

Co. v. N. Atl. Trading Co., 381 F.3d 717, 736 (7th Cir. 2004)) (cleaned up).

Finally, under the third element of a § 1 claim, a plaintiff must plead an injury of

the type intended to be prevented by the antitrust laws and that flows from the unlawful

actions. See In re Dealer Mgmt. Sys. Antitrust Litig., 313 F. Supp. 3d at 950 (quoting Sw.

Suburban Bd. of Realtors, Inc. v. Beverly Area Plan. Ass’n, 830 F.2d 1374, 1377 (7th Cir.

1987); citing U.S. ex rel. Blaum v. Triad Isotopes, Inc., 104 F. Supp. 3d 901, 924 (N.D. Ill.

2015)); see also Rozema v. Marshfield Clinic, 977 F. Supp. 1362, 1374 (W.D. Wisc. 1997)

(“[P]laintiffs alleging market allocation must show that they have suffered an antitrust

injury resulting directly from defendants’ unlawful conduct.”); McGarry & McGarry, LLC

v. Bankr. Mgmt. Sols., Inc., 937 F.3d 1056, 1065 (7th Cir. 2019) (“It’s not enough to allege

that the injury is merely causally linked to the alleged anticompetitive behavior. [The

plaintiff] must also demonstrate that its injury is attributable to an anti-competitive aspect

of the practice under scrutiny. In other words, the injury must flow directly from higher

prices or lower output, the principal vices proscribed by the antitrust laws.”) (cleaned

up). As noted above, the Sherman Act protects against injuries from reduced competition.

See Always Towing & Recovery, Inc., 2 F.4th at 703 (quoting Agnew, 683 F.3d at 334-35).

Even if a plaintiff has an antitrust injury, however, it does not necessarily confer

antitrust standing. See Serfecz v. Jewel Food Stores, 67 F.3d 591, 598 (7th Cir. 1995);

see also Fisher v. Aurora Health Care, Inc., 558 Fed. App’x 653, 655 (7th Cir. 2014) (noting

that, to succeed on his claims, the plaintiff had to establish both an antitrust injury and

antitrust standing); Marion Diagnostic Ctr, LLC v. Becton Dickinson & Co., 29 F.4th 337, 345

n. 7 (7th Cir. 2022) (“Antitrust injury and antitrust standing are related but distinct

concepts.”). By virtue of the antitrust standing requirement, the Sherman Act imposes

additional rules for deciding whether a plaintiff may properly bring a private antitrust

action. McGarry & McGarry, LLC, 937 F.3d at 1063 (quoting Loeb Indus., Inc. v. Sumitomo

Corp., 306 F.3d 469, 481 (7th Cir. 2002)). And, while labeled a form of standing, “antitrust

standing” is actually a misnomer. See id. (quoting Lexmark Int’l, Inc. v. Static Control

Components, Inc., 572 U.S. 118, 127-128, n. 4 (2014)). Unlike Article III standing, which “is

a necessary requirement for a justiciable case or controversy,” antitrust standing concerns

which plaintiffs may bring a cause of action. Id. (quoting U.S. Gypsum Co. v. Ind. Gas Co.,

350 F.3d 623, 627 (7th Cir. 2003); Hammes v. AAMCO Transmissions, Inc., 33 F.3d 774, 778

(7th Cir. 1994)); see also ChampionsWorld, LLC v. U.S. Soccer Fed’n, Inc., 890 F. Supp. 2d 912,

924 (N.D. Ill. 2012) (“Antitrust standing is not jurisdictional.”). The general rule is that

customers and competitors in an affected market have antitrust standing to bring a cause

of action; however, the Seventh Circuit has explained as follows:

From the class of injured persons suffering an “antitrust injury” only those

parties who can most efficiently vindicate the purposes of the antitrust laws

have antitrust standing to maintain a private action…. The existence of an

identifiable class of persons whose self-interest would normally motivate

them to vindicate the public interest in antitrust enforcement diminishes

the justification for allowing a more remote party to perform the office of a

private attorney general[,] particularly when denying standing is not likely

to leave a significant antitrust violation undetected or unremedied. Our

decisions have recognized the need to balance the interests of deterrence

through private antitrust enforcement and avoidance of excessive treble

damages litigation. An appropriate balance is achieved by

granting standing only to those who, as consumers or competitors, suffer

immediate injuries with respect to their business or property, while

excluding persons whose injuries were more indirectly caused by

the antitrust conduct.

Viamedia, Inc. v. Comcast Corp., 951 F.3d 429, 482 (7th Cir. 2020) (collecting cases); Serfecz,

67 F.3d at 598 (quoting In re Indus. Gas Antitrust Litig., 681 F.2d 514, 516, 520 (7th Cir.1982);

Associated Gen. Contractors, Inc. v. California State Council of Carpenters, 459 U.S. 519, 542

(1983)) (cleaned up); see also McGarry & McGarry, LLC, 937 F.3d at 1064 (“Because

antitrust violations may be expected to cause ripples of harm to flow through the Nation’s

economy…Congress did not intend to allow every person tangentially affected by an

antitrust violation to maintain an action to recover threefold damages for the injury to his

business or property. Some injuries are too remote from the violation and the purposes

of the antitrust laws to form the predicate for a suit.”) (cleaned up).

Factors for assessing whether a plaintiff has shown the requisite link between an

antitrust violation and an antitrust injury for purposes of antitrust standing include:

(1) the causal link between the antitrust violation and antitrust injury; (2) any improper

motive; (3) whether the antitrust injury is the type Congress sought to redress; (4) the

directness of the antitrust injury and the market restraint; (5) the speculative nature of

damages; and (6) the risk of duplicative recoveries or complex damages apportionment.

See McGarry & McGarry, LLC, 937 F.3d at 1064-65 (citing Sanner v. Bd. of Trade of Chicago,

62 F.3d 918, 926–27 (7th Cir. 1995); Associated Gen. Contractors, Inc., 459 U.S. at 537-44);

accord Kochert v. Greater Lafayette Health Servs., Inc., 463 F.3d 710, 718 (7th Cir. 2006). The

former three factors relate to the antitrust injury, and the latter three factors relate to

whether the plaintiff can most efficiently vindicate the antitrust laws. McGarry &

McGarry, LLC, 937 F.3d at 1065 (citing Nelson v. Monroe Reg’l Med. Ctr., 925 F.2d 1555,

1563–64 (7th Cir. 1991); Novell, Inc. v. Microsoft Corp., 505 F.3d 302, 311 (4th Cir. 2007);

quoting Serfecz, 67 F.3d at 598). The factors are not “strict requirements” or “exclusive

analytical tools, but they “illustrate the areas of inquiry that may be relevant to a case-

specific evaluation of ‘the plaintiff’s harm, the alleged wrongdoing by the defendant[],

and the relationship between them.’ ” Id. (quoting Associated Gen. Contractors, Inc., 459

U.S. at 535); see also Sanner, 62 F.3d at 930 (“[N]o single factor is conclusive.”).

B. The Parties’ Arguments and

the Court’s Application of the Legal Authorities

Defendants make similar arguments. They argue the allegations of per se unlawful

horizontal market allocation agreements are belied by the PPAs. (Sealed Docs. 116, pgs.

5, 9, 12-18; 120, pgs. 7, 14-15). Defendants argue those agreements, on which Plaintiffs’

claim “entirely relies,” set forth no unreasonable restraint of trade. (Sealed Docs. 116, pgs.

5, 9, 12-18; 120, pgs. 7, 12, 17). Defendants stress that, contrary to Plaintiffs’ allegations,

the PPAs do not restrain Defendant Apple from creating or acquiring a competing

payment network, using direct bank-to-bank transfers as a payment method in Apple

Pay, or sharing its NFC technology with third-party application developers. (Sealed Docs.

116, pgs. 14-15, 17, 19; 120, pgs. 6-7, 11, 17-18, 21). Indeed, Defendants argue those issues

are absent from, or contradicted by, the PPAs, which were necessary to govern how

Defendant Apple could utilize Defendants Visa and Mastercard’s “infrastructure to

enable Apple Pay users to transact with digital versions of their cards.” (Sealed Docs. 116,

pgs. 14-15, 17, 19; 120, pgs. 6-7, 11, 17-18, 21). Based on that necessity, Defendants argue

the PPAs are vertical distribution agreements. (Sealed Docs. 120, pgs. 14-16; 157, pg. 2).

Further, Defendants argue Plaintiffs failed to allege other facts to support their

theory of the case, e.g., other direct evidence of an unlawful agreement or conspiracy or

circumstantial evidence thereof in the form of communications, meetings, or other

interactions between Defendants. (Sealed Docs. 116, pgs. 6, 12-22; 120, pgs. 7, 18-19). As

such, Defendants suggest Plaintiffs’ allegations reflect proper unilateral or independent

business decisions. (Sealed Docs. 116, pgs. 12, 15, 19-20; 120, pgs. 7, 18). Defendant Apple

states: Plaintiffs “offer only the conclusion that Apple acted against its self-interest by

building Apple Pay instead of something entirely different—namely, a payment

network.” (Sealed Doc. 120, pg. 19). In its view, it is unreasonable and “purely

speculative” to suggest the “decision to build an entirely new product (Apple Pay) that

did not then exist in the marketplace,” rather than engage in the “extremely costly, time-

consuming, and difficult endeavor” of developing a payment network like those of

Defendants Visa and Mastercard, was suspicious, “against its economic self-interest,” or

anything but the “prudent and economically rational path.” (Sealed Doc. 120, pgs. 19-21).

Although Plaintiffs allege fees or “cash bribes” were paid to Defendant Apple by

Defendants Mastercard and Visa for its decision not to compete, Defendants argue the

fees were “paid not by the defendant networks[] but by payment-card issuing banks that

are not defendants.” (Sealed Docs. 116, pgs. 6, 8, 21-22; 120, pgs. 21-22). In any event,

Defendants argue Plaintiffs failed to plead the fees or “cash bribes” are anything but

ordinary compensation for access to the iPhone ecosystem. (Sealed Docs. 116, pgs. 6, 21-

22; 120, pgs. 6 n. 1, 21-22). Defendant Apple suggests Apple Pay is free to consumers,

merchants, and payment networks, so it is payment-card issuers who are charged

“nominal fee[s] for transactions made using their cards on Apple Pay.” (Sealed Doc. 120,

pgs. 6, 8). As a result, Defendants state it is “speculative and implausible” that Defendant

Apple conspired with Defendants Visa and Mastercard “to stay out of the payment

network business,” as Plaintiffs mischaracterize “the fees that Apple charges [payment-

card] issuers (rather than payment networks, merchants, or customers) as a ‘bribe’ that

the payment networks pay Apple in exchange for a commitment to not build its own

payment network.” (Sealed Doc. 120, pgs. 6, 21-22) (Emphasis in original omitted.).

Similarly, while the PPAs do not prevent the development of its own payment

network, Defendant Apple states it never had a plan, intent, interest, or economic

incentive to do so, as “Apple Pay has always been premised on creating digital versions

of consumers’ existing payment cards for use on Apple’s mobile devices in a private and

secure way.” (Sealed Doc. 120, pgs. 10-11, 15, 17, 21). Defendant Apple states its own

payment network would be inconsistent with the vision for and roll-out of Apple Pay.

(Sealed Doc. 120, pg. 10). Defendant Apple believes the suggestion it had the potential,

or was uniquely situated, to create a payment network is unsupported speculation,

stating: Plaintiffs “offer the speculation built on further speculation that, had Apple built

its own payment network, millions of customers would have adopted it, as would many

thousands of banks—both [payment-card] issuers and [merchant-bank] acquirers—such

that Apple would have dethroned and forced the incumbent payment networks to lower

the interchange fees applicable to merchant transactions.” (Sealed Doc. 120, pgs. 6-7, 10,

15).5 Defendant Apple argues “pointing to resources or size is insufficient to plead that it

was a potential competitor to the payment networks.” (Sealed Doc. 120, pgs. 15, 21).

Finally, in light of the “highly speculative injury” asserted in this case, Defendant

Apple, but not Defendants Visa or Mastercard, challenges Plaintiffs’ antitrust standing.

(Sealed Doc. 120, pgs. 7-8, 12-13, 22-25). Defendant Apple explains as follows:

Plaintiffs allege that merchants suffer from inflated interchange fees set by

Visa and Mastercard that the [merchant-bank] acquirers pay to the

[payment-card] issuers. According to Plaintiffs, the cost of the allegedly

inflated interchange fees paid by the [merchant-bank] acquirers is typically

passed on to merchants. Plaintiffs claim these interchange fees would be

lower if Apple had not built Apple Pay and instead built and deployed its

own payment network capable—in some unspecified way—of forcing the

existing payment networks to lower their interchange fees. The inferential

causal chain underlying Plaintiffs’ antitrust injury theory is too speculative

and tenuous to support antitrust standing.

(Sealed Doc. 120, pgs. 7-8, 12-13).

Defendant Apple emphasizes, as is purportedly acknowledged by Plaintiffs, “the

derivative and indirect way in which the interchange fees charged by the payment

networks are borne by merchants.” (Sealed Doc. 120, pg. 23). The merchant-bank

acquirers, pursuant to Defendants Visa and Mastercard’s rules, pay interchange fees to

payment-card issuers on a per-transaction basis before passing the costs associated with

those interchange fees along to merchants like Plaintiffs. (Sealed Doc. 120, pgs. 23-24).

5The PPAs define “issuer” as “an entity that provides Accounts and issues Cards.” (Sealed Docs.

116-1, pg. 6; 116-2, pg. 6; 120-1, pg. 6; 120-2, pg. 6). They define “participating issuer” as “a Network Issuer

that participates in the Program with a Card under Network’s brand.” (Sealed Docs. 116-1, pg. 7; 116-2, pg.

8; 120-1, pg. 7; 120-2, pg. 8). “Acquirer” is defined as “a Person licensed by a Payment Network within the

Territory having legal arrangements with merchants (i) entitling Cardholders to charge purchases of

merchants’ goods or services on the Card and (ii) providing for those merchants to transfer the amounts

payable for such Charges to such Person[/the Acquirer] for processing on the applicable Payment

Network.” (Sealed Docs. 116-1, pg. 2; 116-2, pg. 2; 120-1, pg. 2; 120-2, pg. 2).

However, Plaintiffs allegedly failed to claim Apple Pay fees were paid directly to

Defendant Apple or that Defendant Apple planned or prepared to create a payment

network at the time it entered the PPAs with Defendants Visa and Mastercard. (Sealed

Doc. 120, pg. 24 n. 10). Defendant Apple argues “Plaintiffs’ conjecture about both the

pass-on of fees and Apple’s ability to build a payment network that would bring about

lower fees across the market means that their theory of injury rests on an impermissibly

and highly speculative causal chain” with the following “uncertain” links: (1) Defendant

Apple would take the necessary steps to invest in and build a competing payment

network; (2) Defendant Apple would successfully launch that payment network; (3) the

payment network would achieve widespread adoption by merchants, merchant-bank

acquirers, payment-card issuers, and customers; (4) the adoption of the payment network

would be so widespread, and the market penetration by Defendant Apple would be so

successful, that Defendants Visa and Mastercard would face “downward pricing

pressure” relative to their interchange fees; and (5) the resultant savings would have been

passed on to Plaintiffs from the merchant-bank acquirers. (Sealed Doc. 120, pgs. 24-25).

In response, Plaintiffs note “the United States Department of Justice, which is

currently suing Visa for monopolization, [has alleged] Apple…engaged in discussions

with a large debit issuer about building a payment network without Visa or Mastercard’s

involvement.” (Sealed Doc. 154, pgs. 9 n. 7, 15-16, 20) (citing U.S. v. Visa Inc., No. 24-cv-

7214, Doc. 1, ¶ 118 (S.D. N.Y. Sept. 24, 2024)). Plaintiffs argue it is not necessary to assess

the veracity of that allegation, which is subject to judicial notice, at this stage. (Sealed Doc.

154, pg. 9 n. 7). They also stress the allegation that Defendant Apple “branched into the

payments industry in the early 2010s by filing several payments-related patents and by

acquiring a number of start-up companies within the payments space,” resulting in

Apple Pay. (Doc. 101, pg. 19; Sealed Doc. 154, pgs. 9, 20). Defendant Apple allegedly

“work[ed]” to partner with PayPal,” a competitor to Defendants Visa and Mastercard, on

Apple Pay’s launch, but “suddenly dropped [that] planned partnership” at Defendants

Visa and Mastercard’s request. (Doc. 101, pg. 23; Sealed Doc. 154, pgs. 9, 11, 20). The

partnership could have allegedly funded Apple Pay with the National Automated

Clearinghouse for Electronic Funds Transfers (“ACH”), allowed consumers to connect to

their bank accounts, and thereby disintermediated Defendants Visa and Mastercard.

(Doc. 101, pgs. 21-22; Sealed Doc. 154, pg. 10). Without the partnership, Defendant Apple

“limited Apple Pay to operating as a pass-through Mobile Wallet that merely facilitated

payments through the Entrenched Networks, whose payment products were the only

ones that could be loaded onto Apple Pay.” (Doc. 101, pg. 25; Sealed Doc. 154, pg. 11).

If not for the PPAs, which are allegedly per se unlawful horizontal market

allocation agreements, Plaintiffs argue it was in Defendant Apple’s economic interest to

create a payment network, charge lower fees, enable the funding of Mobile Wallets with

third-party sources, and allow merchants to accept payment systems like bank-to-bank

transfers. (Doc. 101, pgs. 5, 25, 28, 31, 50; Sealed Doc. 154, pgs. 11-12). They argue the

Amended Class Action Complaint sufficiently alleges, absent the PPAs and their

provision of fees, Defendant Apple had the plan, intent, and ability to develop a payment

network. (Sealed Doc. 154, pgs. 19-20). After all, it “has a long history of introducing new

features that displaced formerly dominant products,” its “large base of iPhone

users…[could] quickly attract[] millions of U.S. merchants” with the NFC technology,

and its charging of lower fees than Defendants Visa and Mastercard still could have

resulted in a “handsome profit.” (Sealed Doc. 154, pgs. 19-20). Even if the PPAs leave

broader facts to be discovered, Plaintiffs argue they contain substantial direct evidence

of Defendants’ anticompetitive agreement or conspiracy, such as: (1) Defendants’

meeting of the minds; (2) Defendants Visa and Mastercard’s collection of per-transaction

fees from payment-card issuers for payment to Defendant Apple; and (3) Defendants

Visa and Mastercard’s explicit or implied ability to cease those fee payments to Defendant

Apple if it created a competing payment network. (Sealed Doc. 154, pgs. 21-23). In short,

Plaintiffs argue the PPAs explicitly show, if Defendant Apple held up its end of the

bargain by not creating a competing payment network, then it would retain a contractual

right worth hundreds of millions of dollars per year. (Sealed Doc. 154, pgs. 22-23).

Further, in terms of circumstantial evidence of the per se unlawful horizontal

market allocation agreements, Plaintiffs note Defendants took their unlawful actions at

approximately the same time. (Sealed Doc. 154, pgs. 23-24). Defendants Visa and

Mastercard allegedly presented the anticompetitive scheme to Defendant Apple, then

Defendants reduced that anticompetitive scheme to writing by executing the two PPAs,

containing materially similar terms, in August 2014. (Sealed Doc. 154, pg. 24). Plaintiffs

also point to various plus factors that are allegedly suggestive of Defendants’

coordination in the unlawful agreement or conspiracy, including: Defendant Apple’s

decision to drop its plan to enter the payment network market and, instead, to accept the

market allocation provided by the PPAs; Defendant Apple’s above-discussed actions-

against-interest, which “diminish[ed] the value of the iPhone” and represented a

deviation from its conduct in other scenarios; Defendants’ opportunity to conspire after

“extensive discussions to concoct, and to renew in 2017 and 2020, the conspiracy to divide

the Relevant Market” in the PPAs; the concentrated nature of the payment network

market, which warrants close scrutiny of Defendants’ conduct and communications;

Defendants’ history of anticompetitive conduct, as reflected by other resolved lawsuits;

and the pendency of government investigations or lawsuits. (Sealed Doc. 154, pgs. 24-31).

On the issue of antitrust standing, Plaintiffs contend none of Defendant Apple’s

arguments break the causal chain between Defendants’ conduct and Plaintiffs’ alleged

injury. (Sealed Doc. 154, pg. 31). Despite Defendant Apple’s argument that interchange

fees are not directly paid by Plaintiffs to Defendants Visa and Mastercard, Plaintiffs argue

their contrary allegation must be taken as true at the dismissal stage of the case. (Sealed

Doc. 154, pg. 31). Plaintiffs also address Defendant Apple’s argument that the inferential

causal chain underlying their injury is too speculative and tenuous to support antitrust

standing, again stressing that the Amended Class Action Complaint “sets out how Apple

was uniquely positioned to enter the market and had taken concrete steps to do so” but

ultimately decided instead to enter the PPAs. (Sealed Doc. 154, pg. 33). Finally, in the

event the Court grants any portion of Defendants’ Motions to Dismiss, Plaintiffs request

leave to amend the Amended Class Action Complaint. (Sealed Doc. 154, pgs. 35-36).

Here, by way of reminder, Plaintiffs allege Defendants Visa and Mastercard

impose inflated fees for merchants in the United States to use their payment networks.

(Doc. 101, pgs. 4, 40-43). Defendant Apple was allegedly positioned to disrupt Defendants

Visa and Mastercard’s dominance and to restore competition. (Doc. 101, pgs. 4, 15-20, 31-

34). Instead of competing in the relevant market, however, Defendant Apple allegedly

agreed with Defendants Visa and Mastercard on a market allocation, whereby Defendant

Apple would not establish its own payment network, would prevent Apple Pay users

from transferring funds from their bank accounts directly to merchants’ bank accounts,

and would protect Defendants Visa and Mastercard’s payment networks by blocking

competitors’ access to Apple Wallet and its NFC technology. (Doc. 101, pgs. 4-5, 21-31).

In exchange, Defendants allegedly agreed to run Apple Pay transactions through

Defendants Visa and Mastercard’s payment networks and to pay Defendant Apple a

portion of the fees, or “cash bribes,” generated by the payment networks. (Doc. 101, pgs.

4-5, 22-31). Plaintiffs were allegedly injured by paying and continuing to pay artificially

inflated fees, a portion of which was ultimately received by Defendant Apple, to

Defendants Visa and Mastercard for using the payment networks. (Doc. 101, pg. 43).

Plaintiffs specifically allege Defendants’ agreements, as described above,

constitute per se violations of § 1. (Doc. 101, pgs. 5-6, 25, 28, 31, 50). And, as noted above,

Defendants have attached their PPAs to the Motions to Dismiss. (Sealed Docs. 116-1, 116-

2, 120-1, 120-2). Accordingly, when assessing the sufficiency of the § 1 claim alleged by

Plaintiffs in the Amended Class Action Complaint, the Court can consider the terms of

the PPAs. See Kloss, 462 F. Supp. 3d at 874-76; Fosnight, 41 F.4th at 921-22; Trivedi, 609 F.

Supp. 3d at 631; Dean, 46 F.4th at 543; Esco, 107 F.4th at 678-79; Rosenblum, 299 F.3d at 661.

The Court has independently reviewed the PPAs, including the provisions

specifically cited by the parties. (Sealed Docs. 116, pgs. 8 n. 3, 14-17 n. 7, 21-22; 120, pgs.

11, 17-18, 22; 154, pgs. 12-15, 22-23; 157, pgs. 2-6; 159, pgs. 2-4; 163, pg. 2). Based on that

review, it appears to the Court that Defendants’ arguments are confirmed by the PPAs’

express terms—e.g., that Defendants Visa and Mastercard merely bill and collect fees

payable to Defendant Apple by payment-card issuers rather than merchant-bank

acquirers like Plaintiffs, Defendant Apple reserved the unilateral right to change or

suspend any aspect of Apple Pay at any time, Defendant Apple retained the right to

launch a competing payment network and Defendants Visa and Mastercard retained the

right to suspend aspects of their relationships with Defendant Apple,6 Defendants were

largely unrestricted in their other work and transactions by virtue of the PPAs’ non-

exclusivity provisions, and the PPAs are silent on bank-to-bank transfers and the access

of competitors to Apple Wallet and the NFC technology. (Sealed Docs. 116-1, pgs. 22-24,

32-33, 46, 104; 116-2, pgs. 27, 29-30, 39-40, 42, 73; 120-1, pgs. 22-24, 32-33, 46, 104; 120-2,

pgs. 29-30, 39-40, 42, 73). In other words, as alleged, the Court agrees with Defendants

that Plaintiffs’ allegations of per se horizontal market allocation agreements

mischaracterize, and are actually contradicted by, the PPAs, which indicate Defendant

Apple did not agree to refrain from creating a payment network, to restrict bank-to-bank

6On the one hand, the PPA between Defendants Visa and Apple indicates, if Defendant Apple

creates a payment network, Defendant Visa can suspend its participation in Apple Pay or suspend the

entirety of the PPA upon notice to Defendant Apple and a good faith discussion period, the latter of which

would cease the obligation of Defendant Visa to provide certain services to payment-card issuers enrolled

in Apple Pay. (Sealed Docs. 116-1, pgs. 10-15, 46; 120-1, pgs. 10-15, 46). On the other hand, the PPA between

Defendants Mastercard and Apple indicates, if Defendant Apple creates a payment network, Defendant

Mastercard can discontinue a limited license granted to Defendant Apple by Defendant Mastercard.

(Sealed Docs. 116-2, pgs. 39-40, 42). The limited license would then be unavailable for Defendant Apple’s

payment network; however, it would remain in effect with respect to the operation and use of Apple Pay.

(Sealed Docs. 116-2, pgs. 39-40, 42). Accordingly, Defendant Visa has the option of going farther than

Defendant Mastercard in response to Defendant Apple creating a competing payment system.

transfers, or to bar the access of competitors to Apple Wallet and the NFC technology.

See 15 U.S.C. § 1; Always Towing & Recovery, Inc., 2 F.4th at 703-04; In re Outpatient Med.

Ctr. Emp. Antitrust Litig., 630 F. Supp. 3d at 983-88; In re Dealer Mgmt. Sys. Antitrust Litig.,

313 F. Supp. 3d at 949; In re Dealer Mgmt. Sys. Antitrust Litig., 581 F. Supp. 3d at 1047; In

re Broiler Chicken Antitrust Litig., 290 F. Supp. 3d at 788; (Doc. 101, pgs. 4-5, 21-31). The

same is true for the allegation that Defendants Visa and Mastercard paid Defendant

Apple a portion of the fees, or “cash bribes,” received from merchant-bank acquirers, as

the PPAs reveal Defendants Visa and Mastercard billed and collected fees payable to

Defendant Apple by nondefendant payment-card issuers. (Doc. 101, pgs. 4, 22-31, 40-43).

Accordingly, since a comparison of Plaintiffs’ direct allegations regarding the PPAs to the

actual provisions of those agreements serves only to highlight the implausibility of their

§ 1 claim, the Court finds Defendants’ Motions to Dismiss must be GRANTED on this

basis. See Kloss, 462 F. Supp. 3d at 874-76; Fosnight, 41 F.4th at 921-22; Trivedi, 609 F. Supp.

3d at 631; Dean, 46 F.4th at 543; Esco, 107 F.4th at 678-79; Rosenblum, 299 F.3d at 661.

Moreover, aside from this finding as to the direct allegations and the express terms

of the PPAs, the Court finds Plaintiffs’ circumstantial allegations of per se horizontal

market allocation agreements cannot save their § 1 claim. See 15 U.S.C. § 1; Always Towing

& Recovery, Inc., 2 F.4th at 703-04; In re Outpatient Med. Ctr. Emp. Antitrust Litig., 630 F.

Supp. 3d at 983-85; In re Dealer Mgmt. Sys. Antitrust Litig., 313 F. Supp. 3d at 949; In re

Dealer Mgmt. Sys. Antitrust Litig., 581 F. Supp. 3d at 1047; In re Turkey Antitrust Litig., 642

F. Supp. 3d at 722. To be sure, Plaintiffs present a slew of circumstantial allegations

related to, inter alia, Defendants’ power and success in their respective markets, a lack of

competition in those markets, Defendant Apple’s ability to disrupt and dominate

markets, Defendant Apple’s attempt to leverage its way into the payment network

market, Defendants Visa and Mastercard’s fears about Defendant Apple’s potential in the

payment network market, Defendant Apple’s exclusion of PayPal from Apple Pay at

Defendants Visa and Mastercard’s request, Defendant Apple’s willingness to compete

with third-parties in other contexts, and the European Commission’s findings relative to

Defendant Apple’s NFC technology. (Doc. 101, pgs. 10-23, 31-43). However, the Court

finds those circumstantial allegations are too speculative and conclusory to adequately

represent parallel conduct or plus factors that show Defendants violated § 1 by entering

per se horizontal market allocation agreements. See Lumber Liquidators, Inc. v. Cabinets To

Go, LLC, 415 F. Supp. 3d 703, 712 (E.D. Va. 2019) (“To show an unlawful horizontal

agreement between potential competitors, the record must demonstrate that potential

competitors had the ‘necessary desire, intent, and capability to enter the market.’ ”).

Instead, the Court is persuaded by Defendant Apple’s arguments regarding the

speculative and conclusory nature of the allegations that it could succeed in the

seemingly monumental task of disintermediating Defendants Visa and Mastercard from

the payment network market. As alluded to above, and as reflected by the Amended

Class Action Complaint, Plaintiffs premise those allegations, in part, on the dominance

of Defendants in their respective markets. At the same time, though, Plaintiffs allege

Defendant Apple is so dominant that it should have entered an entirely new market—the

payment network market, which is admittedly dominated by, among few others,

Defendants Visa and Mastercard—to eventually disintermediate Defendants Visa and

Mastercard and ultimately achieve a greater economic benefit than was possible under

the PPAs. This is despite Plaintiffs’ own allegation that the PPAs allow Defendant Apple

to receive “payments [that] initially amounted to hundreds of millions of dollars each

year and are now worth billions of dollars each year.” (Doc. 101, pgs. 5, 22).

Plaintiffs may be correct that Defendant Apple, by its nature, was uniquely

situated to reap the high potential reward for disintermediating Defendants Visa and

Mastercard from the payment network market; however, their allegations completely

ignore the difficulties, costs and time, risks, and potential for failure associated with such

an endeavor. For example, by generally alleging Defendant Apple should have taken on

“the Entrenched Networks” by creating a payment network instead of building “an

entirely new product [like Apple Pay]…in the marketplace,” Plaintiffs conject that

Defendant Apple would be successful in investing in and creating a competing payment

network, in launching the competing payment network, in achieving such widespread

adoption and market penetration of the competing payment network that it “dethroned”

“the Entrenched Networks” by forcing “downward pricing pressure” relative to fees, and

in achieving savings that could be passed on to merchants like Plaintiffs. (Sealed Doc.

120, pgs. 6-7, 10, 15, 24-25). And, again, to be a superior economic interest for Defendant

Apple, this endeavor would not only have to succeed but also reap a higher reward than

the hundreds of millions or billions of dollars received by Defendant Apple under the

PPAs. (Doc. 101, pgs. 5, 22). As a result, the Court finds Plaintiffs’ circumstantial

allegations are too speculative and conclusory to adequately reflect a common motive of

Defendants to conspire, to represent parallel acts that are against Defendants’ individual

economic self-interests, to reveal other mixtures of parallel behaviors by Defendants, or

to indicate details of industry structure and practices. See In re Outpatient Med. Ctr. Emp.

Antitrust Litig., 630 F. Supp. 3d at 985; In re Turkey Antitrust Litig., 642 F. Supp. 3d at

722. And, notably, Plaintiffs have not alleged any evidence of a high level of interfirm

communications. See In re Outpatient Med. Ctr. Emp. Antitrust Litig., 630 F. Supp. 3d at 985.

As to the European Commission findings, in particular, the Court notes Plaintiffs

allege, “[u]pon information and belief, the conduct challenged by the [European

Commission] is part of Apple’s unlawful agreements with the Entrenched Networks.”

(Doc. 101, pg. 37). However, as argued by Defendants and as recognized by the Court,

the PPAs are silent on the access of competitors to Apple Wallet and the NFC technology.

(Sealed Docs. 116, pgs. 14, 19; 120, pgs. 11, 18). It is again noteworthy, though, that

Defendant Apple reserved the unilateral right to change or suspend any aspect of Apple

Pay at any time under the PPAs and each Defendant, by virtue of a non-exclusivity

provision in those agreements, were largely unrestricted in their other work and

transactions with third parties like PayPal. (Docs. 116-1, pgs. 15, 22-23, 104; 116-2, pgs. 27,

29, 73; 120-1, pgs. 15, 22-23, 104; 120-2, pgs. 27, 29, 73). As such, there is no nonspeculative

or nonconclusory allegation that Defendants agreed to bar the access of competitors to

Apple Wallet and the NFC technology as opposed to Defendant Apple taking that action,

if at all, on its own. See In re Outpatient Med. Ctr. Emp. Antitrust Litig., 630 F. Supp. 3d at

984; In re Dealer Mgmt. Sys. Antitrust Litig., 313 F. Supp. 3d at 949; see also Monsanto Co. v.

Spray-Rite Serv. Corp., 465 U.S. 752, 760 (1984) (noting a contract, combination, or

conspiracy is required for a violation of § 1, meaning “[i]ndependent action is not

proscribed”); Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 601 n. 27 (1985)

(“Under § 1 of the Sherman Act, a business ‘generally has a right to deal, or refuse to deal,

with whomever it likes, as long as it does so independently.’ ”). In light of the inadequate

circumstantial allegations to support a § 1 claim, the Court finds Defendants’ Motions to

Dismiss must also be GRANTED on this basis. See Kloss, 462 F. Supp. 3d at 874-76;

Fosnight, 41 F.4th at 921-22; Trivedi, 609 F. Supp. 3d at 631; In re Outpatient Med. Ctr. Emp.

Antitrust Litig., 630 F. Supp. 3d at 985; In re Turkey Antitrust Litig., 642 F. Supp. 3d at 722.

Alternatively, for reasons similar to those discussed above, the Court finds

Plaintiffs lack antitrust standing, such that they cannot bring this action. See McGarry &

McGarry, LLC, 937 F.3d at 1063-65; Serfecz, 67 F.3d at 598. In particular, the Court agrees

that Plaintiffs alleged injury is too indirect, remote, and speculative to support antitrust

standing. (Sealed Doc. 120, pgs. 7-8, 12-13). That injury is premised on the passing along

of inflated fees, set by Defendants Visa and Mastercard and paid by merchant-bank

acquirers to payment-card issuers, to merchants by the merchant-bank acquirers, and the

sheer possibility that those fees would be lower if Defendant Apple was motivated to

create a payment network that disintermediated Defendants Visa and Mastercard instead

of building Apple Pay. Therefore, once again, Plaintiffs rely on conjecture related

Defendant Apple’s ability to perceive greater economic success in that market than the

hundreds of millions or billions of dollars that were possible under the PPAs, and to

succeed in the difficult task of disrupting and dominating a market in which Defendants

Visa and Mastercard had allegedly become “entrenched.” As noted above, Defendant

Apple would have to succeed in investing in and creating a competing payment network,

in launching the competing payment network, and in achieving such widespread

adoption and market penetration of the payment network that it “dethroned” “the

Entrenched Networks” by forcing “downward pricing pressure” relative to fees. (Sealed

Doc. 120, pgs. 6-7, 10, 15, 24-25). It is only in the event Defendant Apple was successful at

each of these steps that it could, without a guarantee, achieve savings for merchants like

Plaintiffs by forcing lower fees in the market. For these reasons, the Court finds Plaintiffs

failed to state a sufficient link between the alleged antitrust violation and antitrust injury.

See McGarry & McGarry, LLC, 937 F.3d at 1063-65; Serfecz, 67 F.3d at 598. As such, on this

alternate basis, the Court concludes Defendants’ Motions to Dismiss must be GRANTED.

III. CONCLUSION

As explained above, the Motions to Dismiss are GRANTED in part and DENIED

in part. The Amended Class Action Complaint is DISMISSED without prejudice. As

requested, Plaintiffs shall file a Second Amended Class Action Complaint, if any, within

30 days. See Fed. R. Civ. P. 15(a)(2); Runnion ex rel. Runnion v. Girl Scouts of Greater Chicago

and Nw. Indiana, 786 F.3d 510, 519-20 (7th Cir. 2015); G.T. v. Samsung Elec. Am. Inc., 742 F.

Supp. 3d 788, 801-02 (N.D. Ill. 2024). Failing to timely file a Second Amended Class Action

Complaint will result in a dismissal of the case under Federal Rule of Civil Procedure

41(b). See Fed. R. Civ. P. 41(b); James v. McDonald’s Corp., 417 F.3d 672, 681 (7th Cir. 2005).

SO ORDERED.

s/ David W. Dugan

Dated: July 9, 2025 __________________________

DAVID W. DUGAN

United States District Judge