U.S. District Judge Vince Chhabria dismissed an antitrust lawsuit filed against Apple by Venmo and Cash App customers, accusing the California company of being anticompetitive with its Apple Cash product.
The lawsuit, originally filed in San Jose on November 17, 2023, seeks to hold Apple accountable for its monopolistic practices involving the Apple iOS App Store.
According to the complaint, Apple allegedly made it difficult or impossible for competitors of its Apple Pay service to launch desirable features, such as integrating decentralized cryptocurrency payments into existing or new products and services.
As a result, Complainants claim, Venmo, CashApp, and other existing or new services are unable to introduce features that would provide iOS end users with competitive pricing and improved functionality. Judge Chhabria granted Apple’s motion to dismiss on 3/26/20. According to filing documents, the complaint had "several fatal problems."
The filing also states that the plaintiffs failed to identify what antitrust actions occurred or why competitors such as Zelle were not included in the original complaint. It also called the plaintiffs' lawsuit "speculative" and outlined what the court found to be a flawed premise.
Essentially, the original complaint claimed that Apple’s terms of service for products like Venmo and Cash App that appeared on the App Store prohibited those companies from including cryptocurrency functionality in their products. The judge's ruling cited the relevant rule (Guideline 3.1.5 in the App Store T.O.S.) and rejected its applicability in the lawsuit. According to the filing:
“Even assuming that Guideline 3.1.5 restricts decentralized cryptocurrency trading (which seems questionable), it’s unclear how a company that agrees to guidelines outlining Apple Store requirements for apps that facilitate cryptocurrency trading would constitute an unlawful agreement.”
Going forward, plaintiffs will have 21 days from the filing date to file case amendments to force the court to move forward with the lawsuit before a dismissal becomes part of the record.
However, the odds may be against the plaintiffs, given the tenor of the judge's final comments in the filing: "Plaintiffs should not believe that the flaws cited in this ruling are the only flaws in the complaint. Apple's motion to dismiss brings to their attention more potential problems. Indeed, it is difficult to see how an amendment could save this case. However, Out of an abundance of caution, the motion to dismiss is granted, with leave to amend. If a complaint to amend is not filed within 21 days of this ruling, the dismissal will be with prejudice."
