Company alleges anticompetitive behavior, monopolization and attempted monopolization that blocks competition and inflates payment processing costs for mid-to-large table service restaurants.
Payment Logistics, a San Diego, California based electronic payment processing company, today filed an antitrust action against Shift4 Payments, LLC; Shift4 Corporation; and Lighthouse Network, LLC. The suit filed in United States District Court in San Diego, alleges the newly formed Shift4 Payments, which resulted from Lighthouse Network’s acquisition of Shift4 Corp., is attempting to monopolize the payment interface and merchant account services market for mid-sized table service restaurants by cutting out independent payment processors and resellers while positioning itself to unilaterally raise prices against a locked-in customer base.
In mid-to-late 2017, Lighthouse Network acquired the Restaurant Manager, FuturePOS and POSitouch brands of POS systems and their parent companies. These systems cater to the mid-to-large table service restaurant market. Then in January 2018, Lighthouse acquired Shift4 Corp., the largest independent payment gateway in the United States and rebranded its organization as Shift4 Payments. The suit seeks a preliminary and permanent injunction against Lighthouse Network’s acquisition of Shift4 Corp.
“The POS systems Lighthouse acquired relied on third party payment interfaces to connect to the multitude of payment processors out there. These payment interfaces ensured the ~60,000 restaurants who use these POS systems were free to work with the payment processor of their choice. Competition among payment processors meant these restaurants could obtain competitive credit card processing rates with innovative and secure payment processing technology,” said Dustin Niglio, chief executive officer of Payment Logistics. “The Shift4 acquisition serves to eliminate third party payment interfaces and lock these restaurants into using Shift4’s payment interface and merchant account service. This anticompetitive behavior positions Shift4 Payments to unilaterally increase pricing for both its payment interface and merchant account service; giving end users of these POS systems little choice but to absorb the additional fees or incur the debilitating cost of completely replacing their POS systems.”
“The Shift4 acquisition serves to eliminate third party payment interfaces and lock these restaurants into using Shift4’s payment interface and merchant account service.”
The complaint, describes how before the acquisition, Lighthouse had no proprietary payment interface and could only direct accounts to their preferred provider; they could not cut out competitors. The challenged merger gave them control of the Shift4 payment interface. Now, besides no longer offering or supporting independent payment interfaces, restaurants are being told that they must either switch to Shift4’s payment processing service or pay debilitating monthly and transaction costs.
Mr. Niglio concluded, “Payment Logistics wants to re-establish a level competitive playing field where we can compete based on our superior payment technology, pricing structure, commitment to transaction security and our enhanced level of hands-on customer support. We hope that this lawsuit will restore competition and protect innovation to the benefit of restaurant customers, thousands of independent restaurants, payment processors and system resellers.”
The case is Payment Logistics Limited v. Lighthouse Network, LLC, Shift4 Corporation and Shift4 Payments, LLC, in the US District Court for the Southern District of California. Case No. 3:18-cv-00786-L-AGS (filed April 24, 2018). To view a copy of the complaint, go to: http://www.paymentlogistics.com/docs/shift4antitrustcomplaint.pdf
About Payment Logistics
Payment Logistics Limited, is a family owned and operated payment technology and merchant account services provider based in San Diego, California. Founded in 2003 by brothers Britton and Dustin Niglio, Payment Logistics has built its business the old-fashioned way: by delivering value added technology and services at competitive prices. For more information, visit www.paymentlogistics.com.
Payment Logistics is represented by MoginRubin LLP an award-winning antitrust and competition law boutique with a national practice focusing on antitrust, unfair competition, complex business and investment cases, including class actions and challenges to unlawful mergers. The firm has offices in Washington, D.C. and San Diego, California. For more information visit www.moginrubin.com
Payment Logistics Limited