Apple is facing an antitrust class-action lawsuit in the US accusing it of illegally profiting from card issuers through policies that prevent competition to its Apple Pay wallet, according to Bloomberg.
The proposed class-action complaint by Affinity Credit Union marks the latest antitrust battle for the iPhone maker, after facing increased scrutiny in recent years over its App Store policies from government regulators. European regulators, after a nearly two-year investigation, also found on a preliminary basis that Apple abused its dominant position with Apple Pay in the market for tap-to-pay apps or mobile wallets.
The tech giant currently charges fees to card issuers who use Apple Pay — 0.15% on credit card transactions and 0.05% on debit cards — and companies such as PayPal and Square are unable to launch similar tap-to-pay iPhone apps.
A complaint filed in San Francisco federal court accuses Apple of denying rivals access to the NFC chip technology in iPhones needed to develop a competing mobile wallet. This means that only Apple Pay can make contactless payments at the point of sale, meaning the company „coerces” customers.
Having secured a monopoly, Apple charges card issuers who use Apple Pay supracompetitive fees for a service that is available on Android devices for free, according to the lawsuit.
The policy sees Apple extracting up to $1 billion in 2019 from more than 4000 banks and credit unions in fees in violation of federal antitrust law, according to attorneys at Hagens Berman and Sperling & Slater, on behalf of plaintiff, Iowa’s Affinity Credit Union. That figure is expected to grow significantly in coming years, Affinity says.
Apple Pay is the only mobile payment service that may access the NFC ‘tap and go’ technology embedded on iOS mobile devices for payments in stores, a process that has been damned by banks in a number of jurisdictions for preventing competition from their own proprietary apps.
“When you compare the functionality of Apple Pay to mobile wallets available on Android devices – Google Pay, Samsung Pay – you’re essentially holding up a mirror; they are essentially identical,” says Steve Berman, Hagens Berman managing partner. “And yet, the same service on Android that card issuers pay absolutely nothing for costs them a collective $1 billion annually through Apple Pay.”
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
