Antitrust Suit Against Shopify: Judge Lets Monopoly Claims Advance
A federal court concluded that Sezzle’s complaint sufficiently pleads anticompetitive conduct tied to buy now, pay later on Shopify’s e-commerce platform, while also granting parts of Shopify’s effort to dismiss certain allegations.
Dive Brief:
| Claim/Allegation | Judge’s Ruling/Outcome |
|---|---|
| Sezzle plausibly alleged that Shopify holds monopoly power and engaged in conduct restraining competition in the buy now, pay later market. | Allowed to proceed past the motion-to-dismiss stage. |
| Sezzle alleged Shopify compelled merchants or shoppers to use Shop Pay Installments. | Dismissal granted in part as to the compulsion-related allegations. |
| Sezzle plausibly alleged Shopify’s dominance in the United States drag-and-drop online store market and in a buy now, pay later aftermarket on Shopify-based websites. | Market-dominance allegations deemed adequately pleaded for purposes of the ruling. |
Dive Insight:
On Tuesday, Sezzle issued a statement summarizing the ruling, saying it was encouraged the court allowed key monopolization-related claims to continue while the case proceeds. Spokespeople for both companies did not immediately respond to emailed requests for comment.
At the pleading stage, the ruling signals that the court views the alleged market definition and exclusionary conduct as sufficiently concrete to warrant discovery rather than dismissal.
Sezzle brought the lawsuit in June, asserting that the Canadian e-commerce company systematically harmed its business and violated antitrust laws by favoring Shopify’s own buy now, pay later option over Sezzle’s for roughly four years. In addition to alleging harms from those practices, Sezzle is seeking monetary damages and injunctive relief that would bar conduct it says steered merchants and shoppers toward Shopify’s preferred installment offering.
Sezzle has not reported a quantified impact on its earnings or forward-looking guidance as a result of the lawsuit, and it has not publicly disclosed what portion of its revenue is attributable to transactions on Shopify-powered storefronts.
Shopify, headquartered in Ottawa, says it powers millions of online storefronts in over 175 countries. Shop Pay Installments launched in 2021 and, the filings state, now reaches about 4.4 million merchants worldwide.
The complaint contends Shopify skewed the marketplace by using contracts that penalized sellers with added fees when they chose Sezzle or another non-Shopify pay later provider, creating an unlawful restraint of trade. Sezzle also points to terms and related platform rules that it says made third-party options more costly or less functional, including fees or conditions tied to checkout configuration and payment-related integrations.
- Sherman Antitrust Act (Sections 1 and 2).
- Clayton Act (Sections 4 and 16).
- Minnesota antitrust statutes (Minn. Stat. § 325D.49).
- Minnesota deceptive practices statutes (Minn. Stat. § 325D.44).
In a September filing seeking dismissal, Shopify argued that much of Sezzle’s pleading targets product decisions on the commerce platform that are not designed to benefit Sezzle’s business. Shopify also argued that Sezzle failed to plausibly define the relevant markets and monopoly power, and that the challenged conduct reflected legitimate business and product choices rather than unlawful exclusion.
The company said Sezzle’s points about checkout flow, inventory locks, order identifiers, and embedded payments amount to dissatisfaction that Shopify will not provide assistance on Sezzle’s preferred terms.
Tostrud held oral argument on the dismissal bid in December. After Sezzle filed suit in June and Shopify moved to dismiss in September, the court’s order allowed several claims to proceed while narrowing others, and the case is expected to move into the next procedural stages on the surviving allegations.
In his order, the Minneapolis-based judge on the United States District Court for the District of Minnesota concluded that Sezzle adequately pleaded an antitrust injury and has also plausibly claimed willful monopolization of buy now, pay later services on Shopify-hosted sites, rather than gains due to a superior product, business acumen, or mere accident.