Apple faces US antitrust suit over Apple Pay
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.
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 supra competitive 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 annually 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.
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.”
Earlier this year the European Commission charged Apple with restricting access to the NFC chip technology in a move that could ultimately cost the firm billions of euros in fines.
