A proposed class action lawsuit targets Apple Pay, claiming that Apple has an illegal monopoly on contactless payments on the iPhone, forcing card issuers to pay fees (via Bloomberg). The case is being launched by the Iowa-based Affinity Credit Union, which issues debit and credit cards that are compatible with Apple Pay, but the company’s lawyers hope to make it a class action lawsuit so other card issuers can participate in the lawsuit.
According to the complaint, which you can read in its entirety below, Apple earns over $ 1 billion a year by charging credit card companies up to 0.15 percent per transaction in Apple Pay fees, and yet the same card issuers do not have to pay anything when their customers use “functionally identical Android wallets”[ads1];. The case claims that Apple violates the antitrust law by making it so that Apple Pay is the only service that can make NFC payments on its iPhones, iPads and Apple Watches. It also says that Apple prevents card issuers from transferring these fees to customers, making it so that iPhone owners have no incentive to find a cheaper payment method.
As we have discussed for a long time over Epic v. Apple lawsuit, a case like this may depend on what a judge determines the relevant market may be – here the plaintiffs say that Apple has a monopoly on “Tap and Pay iOS mobile wallets”. But even if a judge agrees that it is true, they can still decide that there is no real monopoly because customers can always switch to Android, where other mobile wallets are located.
Litigation is not automatically granted status as a class action – a judge must decide whether it should be granted or not. However, the law firm handling the Affinity case, Hagens Berman, has a bit of a track record of class action lawsuits against Apple; it was involved in getting developers a $ 100 million settlement after claiming that the rules in the App Store were unfair, as well as with the e-book pricing case that ended with Apple returning around $ 400 million back to customers.
The aim of the lawsuit, according to a press release from the law firm, is to change Apple’s guidelines that force all contactless payments to go through Apple Pay, and to get the company to reimburse card issuers for the fees that the plaintiffs demand illegally. charged.
This is not the only challenge Apple faces in terms of running Apple Pay. The EU recently protested the fact that third-party developers can not use the iPhone’s NFC system for payments, claiming that the restrictions lead to “less innovation and less choice for consumers for mobile wallets on iPhones.” Now the company may face a legal battle over the issue in the United States as well.
Apple did not respond immediately The Vergehis request for comment on the matter.