Court lets Sezzle antitrust claims proceed

U.S. District Judge Eric Tostrud ruled on May 11 that Sezzle can continue pursuing core antitrust claims against Shopify in federal court in Minnesota. The order granted Shopify’s motion to dismiss only in part, dismissing Sezzle’s tying claim without prejudice while allowing monopolization, attempted monopolization, restraint-of-trade and parallel state-law claims to move forward. Sezzle disclosed the ruling on May 12 and said the decision was procedural, not a finding of liability. The case keeps alive a closely watched challenge to how Shopify structures checkout and payment options on merchant sites. ### Which parts of Sezzle’s case survived? Judge Tostrud wrote that Sezzle’s Section 2 Sherman Act claims survive because the company “plausibly alleged” a relevant market, Shopify’s monopoly power and anticompetitive conduct. The order also let Sezzle’s broader Section 1 restraint claim proceed, along with related Minnesota antitrust and deceptive-trade claims to the same extent as the federal claims. (cases.justia.com) Count III, Sezzle’s unlawful tying theory, was dismissed without prejudice. The judge said Sezzle had not plausibly alleged that Shopify coerced merchants or consumers into purchasing or using Shopify’s payment processor, which was central to that tying claim. ### What does Sezzle say Shopify did inside checkout? Sezzle’s June 9, 2025 complaint said Shopify used its control over its e-commerce platform to stifle competition in buy now, pay later services. (cases.justia.com) Sezzle alleged Shopify favored Shop Pay Installments, its in-house installment product launched in 2021, and made rival options harder for merchants and shoppers to use during checkout. The court’s order summarized those allegations in similar terms. Judge Tostrud wrote that after launching Shop Pay Installments in 2021, Shopify took steps that made Sezzle “a less attractive option to merchants and consumers,” including making Sezzle harder to find in the purchasing process and charging merchants a fee for Sezzle-facilitated transactions. (sec.gov) ### What did the judge say about market power? The Minnesota court said Sezzle had plausibly alleged monopoly power in the markets it defined for the case at this stage. Payments Dive, summarizing the order, reported that Tostrud wrote Sezzle had plausibly alleged Shopify has monopoly power in both the U.S. drag-and-drop e-commerce platform market and the BNPL services aftermarket on Shopify-based platforms. (cases.justia.com) That matters because the ruling came on a motion to dismiss, where the court tests whether the complaint states legally sufficient claims, not whether Sezzle has proved them. Sezzle said in its May 12 statement that the remaining claims will proceed and that the ruling does not constitute a finding of liability against Shopify. (paymentsdive.com) ### What relief is Sezzle seeking? Sezzle’s June 2025 filing said it is seeking an injunction to stop what it called Shopify’s anticompetitive conduct and restore competition and consumer choice on Shopify’s platform. The company also said it is seeking damages that could be trebled under antitrust law. Sezzle told investors when it filed suit that revenue tied to Shopify’s e-commerce platform represented less than 5% of Sezzle’s total revenue in the first quarter of 2025. (markets.financialcontent.com) The company also reaffirmed its 2025 guidance at that time. ### What has Shopify argued in response? Shopify argued in its dismissal motion that Sezzle’s complaint largely reflected dissatisfaction with platform features that were not designed on Sezzle’s preferred terms. (sec.gov) Payments Dive reported that Shopify’s September motion said allegations about checkout flow, inventory locking and order IDs amounted to frustration that Shopify did not provide Sezzle the assistance it wanted. Sezzle and Shopify did not respond to Payments Dive requests for comment after the ruling, that publication said. Sezzle’s own May 12 statement did not add new allegations beyond the court’s procedural update. ### What happens next in the Minnesota case? The case is captioned Sezzle, Inc. v. Shopify, Inc., No. 25-cv-2395, and is pending in the U.S. District Court for the District of Minnesota. (paymentsdive.com) Judge Tostrud’s May 11 opinion leaves the surviving federal and state claims in place for further litigation, while the dismissed tying claim was dismissed without prejudice, leaving open the possibility of a revised pleading or later dispute over that theory. (cases.justia.com)