Northern District of California Dismisses Complaint Challenging PayPal Anti-Discrimination Provisions
Antitrust and Unfair Competition Law Section of the California Lawyers Association
Furthering knowledge about antitrust, unfair competition, trade regulation and privacy issues
Sabol v. PayPal Holdings, Inc., No. 23-cv-05100-JSW, 2024 WL 3924686 (N.D. Cal. Aug. 23, 2024)
Plaintiffs, ecommerce purchasers using PayPal alternatives,?sued PayPal alleging that its merchant contracts’ anti-discrimination provisions (ADPs) prevented merchants from steering consumers to cheaper payment platforms and forbid discounts on purchases made with non-PayPal payments. Together these ADP provisions were alleged to eliminate price competition in payment method, depriving plaintiffs of the discounts they could have otherwise secured. 2024 WL 3924686, at *1. The court dismissed the complaint, deeming the assumption that merchants would have offered discounts to customers not using PayPal in the absence of the ADPs to be “too attenuated” to maintain antitrust standing.
Plaintiffs also alleged that the ADPs caused increased prices across all the products because they undermined rival payment processors’ incentive to undercut PayPal.?This theory, said the court, was even “more attenuated” than the first, and was simply too indirect and speculative to establish antirust standing. Id. at?*4.
California state antitrust claims were then dismissed because the “Cartwright Act mirrors the Sherman Act, the claims rise and fall together.” Id. at?*4.?Nor were the claims cognizable under the unfair prong of the UCL “because a UCL claim sounding in antitrust rises and falls with the antitrust claim.” Id. at *4.?Leave to amend was granted.