Apple is Being Sued for having a Monopoly on the Tap-To-Pay Feature on the iPhone

A planned class action lawsuit accuses the business of breaking antitrust laws.

According to a planned class action lawsuit, Apple Pay is the target of an illegal monopoly over contactless payments on the iPhone that enables it to compel card issuers to pay fees (via Bloomberg). Affinity Credit Union, based in Iowa, is the plaintiff in the complaint; it issuing debit and credit cards that are compatible with Apple Pay. However, the company's attorneys intend to turn the case into a class action so that other card issuers can also join the claim. The case, which you can read in full below, claims that while credit card companies pay Apple Pay fees that can range from 0.15 percent to over $1 billion annually, they are not required to do so when their customers use "functionally similar Android wallets." The lawsuit claims that by restricting Apple Pay to being the only service available for NFC payments on its iPhones, iPads, and Apple Watches, Apple is in violation of antitrust laws. Additionally, it claims that Apple forbids card issuers from passing on such fees to users, depriving iPhone owners of any motivation to look for a less expensive payment option. A case like this could depend on what the judge determines the relevant market to be, and in this instance, the plaintiffs claim Apple has a monopoly on "Tap and Pay iOS mobile wallets," as we've covered extensively during the Epic v. Apple trial. Judges may nevertheless conclude that there is no actual monopoly even if they concur that this is the case because clients may always migrate to Android, where other mobile wallets are available. Class-action status is not automatically awarded in lawsuits; rather, a judge must decide whether to do so. Hagens Berman, the law firm representing Affinity, has experience with class-action lawsuits against Apple; it was involved in obtaining a $100 million settlement for developers who claimed that the App Store's policies were unfair as well as the ebook price fixing case, which resulted in Apple returning about $400 million to customers. According to a press statement from the law firm, the lawsuit attempts to amend Apple's regulations that require all contactless purchases to go through Apple Pay and to force the company to pay card issuers back for the costs that the plaintiffs believe were improperly assessed. There are other difficulties with how Apple Pay is managed that are present as well. The EU recently protested to the fact that third-party developers aren't allowed to utilize the iPhone's NFC system for payments, saying that this limits "innovation and reduces consumer choice for mobile wallets on iPhones." The business may now contend with legal action in the US about the problem.