Apple is being sued for having a monopoly on the iPhone’s tap-to-pay

Apple is being sued for having a monopoly on the iPhone’s tap-to-pay

A proposed class-action lawsuit targets Apple Pay, alleging that Apple has an illegal monopoly on contactless payments on iPhone, allowing it to force card issuers to pay fees (via Bloomberg). The lawsuit is being initiated by Iowa-based Affinity Credit Union, which issues debit and credit cards compatible with Apple Pay, but the company’s lawyers hope to turn it into a class action so other card issuers can join the lawsuit.

According to the complaint, which you can read in full below, Apple makes over $1 billion annually by charging credit card companies up to 0.15 percent per transaction in Apple Pay fees, and yet those same card issuers don’t have to pay anything when their customers use “functionally identical Android wallets”. The lawsuit alleges that Apple violates antitrust laws by making Apple Pay the only service capable of making NFC payments on its iPhones, iPads and Apple Watches. It also says Apple is preventing card issuers from passing these fees on to customers, resulting in iPhone owners having no incentive to find a cheaper payment method.

As we discussed at length during the Epic vs Apple Legal proceedings, a case like this may depend on what a judge decides for the relevant market – here the plaintiffs say that Apple has a monopoly on “Tap and Pay iOS mobile wallets”. But even if a judge agrees that’s true, he could still rule that there’s no true monopoly because customers can always switch to Android where there are other mobile wallets.

Claims are not automatically granted class action status—a judge must decide whether or not to grant it. However, the law firm handling Affinity’s case, Hagens Berman, has some track record of class action lawsuits against Apple; It was involved in getting developers a $100 million settlement after allegations that App Store rules were unfair, as well as the e-book price-fixing case that ended with Apple bouncing around Returned $400 million to customers.

The goal of the lawsuit, according to a press release from the law firm, is to change Apple’s policies that force all contactless payments to go through Apple Pay and get the company to reimburse card issuers for fees the plaintiffs are illegally claiming make charged.

This isn’t the only challenge Apple faces when running Apple Pay. The EU recently objected to the fact that third-party developers cannot use the iPhone’s NFC system for payments, claiming that the restrictions result in “less innovation and consumer choice for mobile wallets on iPhones”. Now the company could also face a lawsuit in the United States over the problem.

Apple didn’t immediately respond The edge‘s request for comment on the case.

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