BNPL provider Sezzle has sued Shopify, alleging that the e-commerce marketplace has been stifling competition on its platform.
In a suit filed in the US District Court for the District of Minnesota, Sezzle says Shopify violated antitrust laws.
Shopify has been engaging in "monopolistic and anticompetitive business practices in order to stifle competition" for BNPL options, says the suit.
The Canadian shopping giant "used its market power" to make its own BNPL options the default provider on merchant sites, alleges the lawsuit.
Shopify rolled out Shop Pay Installments in 2021 through a partnership with BNPL provider Affirm.
Sezzle claims Shopify "rigged the checkout process on merchants’ websites to make it extraordinarily difficult for consumers to use any alternative BNPL providers".
Meanwhile, "Shopify used its power to force millions of merchants to enter into anticompetitive contracts, which penalised them (by charging them) for using Sezzle," states the suit.
Sezzle is seeking trebled damages and an injunction preventing Shopify from continuing the practices alleged.
Charlie Youakim, CEO, Sezzle, says: “This action is an important step in ensuring that merchants and consumers have access to diverse and innovative payment solutions of their choice.”