A complaint has been filed against Apple, claiming that the company has a monopoly over contactless payments on iPhone. The complaint has been filed by Affinity Credit Union, which issues debit and credit cards that are compatible with Apple Pay. While the complaint has only been filed by Affinity Credit Union, the company’s lawyers hope to make it a class-action lawsuit so other card issuers can also join.
The proposed class-action lawsuit claims that Apple makes over $1 billion by charging credit and debit card companies up to 0.15% in Apple Pay transaction fees. However, the same companies don’t have to pay any fee when their customers use the “functionally identical Android wallets” for contactless payments. It also says that Apple prevents the same companies from passing on these extra charges to the customers.
In addition, the lawsuit also alleges that Apple Pay violates anti-trust as the company doesn’t allow any other service to carry out contactless NFC payments on iPhones. While on Android smartphones, you can configure any app to use the NFC chip for contactless payments, Apple only allows its own Apple Pay service to be used for NFC-based payments. Though it appears that proving anti-trust would be difficult as the judge can always say that the customers can switch to Android, on which plenty of mobile wallets are available.
While the judge has to pass the decision if a lawsuit is classified as a class action, the law firm handling the case, Hagens Berman, has an excellent track record of class-action lawsuits against Apple. The company was responsible for the $100 million settlement after it proved that the App Store rules were unfair. It has also been involved in a number of other class-action lawsuit settlements.
The plaintiff claims that the lawsuit aims to force Apple to pay card issuers for the fees it has charged them. It also wants Apple to change the policy that forces every contactless payment to go through Apple Pay. And Affinity Credit Union isn’t the only one going against Apple. In May 2022, the European Commission alleged that Apple unfairly abuses its dominant position in the “market for mobile wallets” by limiting third parties’ access to the iPhone NFC chip.
