A Lawsuit Charges Apple Restricts Competition in Peer-to-Peer Payments

A new federal lawsuit against Apple Inc. alleges the iPhone maker restricts competition in peer-to-peer payments by hampering rivalry with its own Apple Cash app. The restrictions, the suit charges, include provisions against what the suit calls “feature competition,” such as cryptocurrency payments, that could moderate pricing for peer-to-peer payment users.

The case, filed Friday, explicitly names PayPal Holdings Inc.’s Venmo app and Block Inc.’s Cash App as among the peer-to-peer payment apps Apple allegedly restricts, though Apple is the sole defendant. It asks for injunctive relief as well as “actual and/or treble damages” on behalf of users of the affected money-transfer apps.

Apple did not respond early Tuesday to a request for comment on the suit, filed in the U.S. District Court for the Northern District of California. The case follows other legal actions taken in recent years against Cupertino, Calif.-based Apple alleging the company uses anti-competitive or unfair tactics to, for example, restrict the range of payments providers sellers on the App Store can use.

The latest action charges Apple’s restrictions on competing peer-to-peer payments apps crimp the ability of those apps to launch “desirable new features,” calling out explicitly “decentralized blockchain/cryptocurrency technology.” The restrictions, the suit alleges, also prevent peer-to-peer apps from reducing costs and increasing “throughput” for transactions and allow Apple to protect its pricing from competing services. Block’s Cash App, in particular, has from its start featured the ability to buy, store, and pay with Bitcoin.

PayPal in particular has had some success working with Apple in payments services apart from peer-to-peer transfers. The latest case arises only weeks after Apple and PayPal agreed to add PayPal and Venmo credit cards to the Apple Wallet.

Peer-to-peer apps don’t generally charge users fees for routine transfers, though pricing may apply if a credit card is used to fund a payment or if the user requests an instant transfer. Venmo, for example, levies a 3% fee in the former case, and 1.75% for immediate payment. Cryptocurrency transfers, some experts allege, could be significantly less expensive for users.

At least some observers express sympathy with the suit, without expressing an opinion on its merits or on the probable outcome of the action. “Frankly, I think it just doesn’t seem to be the right thing for Apple to do,” notes Thad Peterson, a strategic advisor with the consulting firm Datos Insights. “Apple should be broadening the reach for users rather than limiting their use.”

The suit, case number 5:23-cv-5981, lists four individuals by name as plaintiffs,, along with “all others similarly situated.”