Court rules in favor of Apple in class action over crypto payment policies

A California judge dismissed a class action lawsuit against Apple that accused the tech giant of imposing restrictions on third-party crypto payments on March 26.

District Judge Vince Chhabria said the complaint contained “several fatal problems,” including inadequately alleged agreements between Apple and other payment services.

He expressed doubts that the agreements restricted decentralized crypto transactions as alleged, asserting it is not clear that such an agreement would be unlawful under the Sherman Antitrust Act.

Meanwhile, the allegations of antitrust standing were found to be inadequate because any links between Apple’s alleged anticompetitive behavior and alleged injury were speculative. The plaintiffs claimed they paid overinflated fees to certain third-party apps because of Apple’s agreements.

Furthermore, the case had problems with its relevant market definition because Zelle — a payment app mentioned by the plaintiffs — was excluded from the definition.

The judge observed other issues and said an amendment to the case was unlikely to change the outcome of the lawsuit. However, the court has given plaintiffs 21 days to amend the case.

The case will be dismissed without prejudice if the plaintiffs fail to make amendments by the deadline.

Centralization vs. decentralization

Initially filed in November 2023, the lawsuit alleged that PayPal‘s Venmo, Google Pay, Cash App, and Apple Cash all agreed to Apple’s store guidelines, thereby agreeing to terms preventing each app from supporting decentralized crypto transactions.

Apple asked for the class action lawsuit to be dismissed in February. That request made most of the same points confirmed in the judge’s current dismissal.

Aside from their broader legal arguments, Apple’s defense asserted that the plaintiffs’ claims were factually incorrect, writing:

“There are apps in the App Store that facilitate decentralized [crypto] transactions.”

The defense added that a particular rule, App Store Guideline 3.1.5, requires third-party apps to handle transactions through an approved exchange and “does not apply to, much less categorically prohibit” apps that offer decentralized crypto transactions.

Plaintiffs initially argued that the same section undermines decentralization by requiring the involvement of intermediary exchanges.

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