Venmo, Cash App users sue over Apple crypto-pay ban

A group of Venmo and Cash App users accused Apple Inc. of violating antitrust laws by blocking peer to peer payment services on its App Store from accepting cryptocurrencies.

The putative class action, filed Nov. 17 in federal court in San Francisco, claims that Apple’s ban on cryptocurrencies being used by peer-to-peer payment apps stymies competition and inflates transaction fees for people who use Cash App Inc., Venmo Inc., and Apple’s Apple Pay.

According to the complaint, Apple has gone as far as contracting out the ability of existing payment apps to add features allowing cryptocurrencies to be sent, and then blocked new payment apps seeking to do the same. The plaintiffs claim that Apple barred the cryptocurrency payment app Damus, which was backed by Jack Dorsey — former Twitter CEO and current CEO of Block Inc., Cash App’s parent company.

The press offices for Apple, Venmo, and Cash App could not be reached for comment Friday. The first case management conference will be heard by U.S. District Judge Vince Chhabria on Feb. 16. Pierre et al. v. Apple Inc., 3:23-cv-05981 (N.D. Cal. filed Nov. 17, 2023)

Attorneys for the plaintiffs — Andrew C. Wolinsky, Yavar Bathaee, and Brian J. Dunne of Bathaee Dunne LLP — argued in the complaint that peer-to-peer cryptocurrency apps would eliminate the need for a middleman and would force prices to come down for consumers.

“Absent Apple’s anti-competitive restraints, new entrants (or existing competitors) would introduce desirable new features in iOS peer-to-peer payment products, including the use of decentralized blockchain/cryptocurrency technology to reduce transaction costs and increase throughput for peer-to-peer payments,” the attorneys wrote. “The introduction of feature competition in the long-stagnant iOS peer-to-peer payment market would mitigate what consumers in this market have for years suffered due to Apple’s marketwide restraints: rapidly inflating prices, an absence of new products and competitors, and a glaring absence of feature competition among existing entrants.”

Antitrust issues surrounding Apple’s App Store and Apple Pay have been mounting in recent months.

On Sept. 27, a federal judge in Oakland denied Apple’s attempt to dispose of a putative class action filed by a group of credit unions. They accused the tech giant of thwarting the ability of iPhone, iPad, and Apple Watch users from using competing digital wallets and charging financial institutions inflated transaction fees.

That case is pending before U.S. District Judge Jeffrey S. White in Oakland and a case management conference is set for Dec. 1. Affinity Credit Union v Apple Inc., 4:22-04174 (N. D. Cal., filed July 18, 2022).