Apple to face antitrust lawsuit over Apple Pay dominance
Apple is now facing an antitrust lawsuit over its Apple Pay mobile wallet, with three credit unions leading the charge. The unions claim that the company has violated the Sherman Anti-Trust Act by imposing excessive processing fees and preventing other digital wallets from using its NFC-scanning hardware. The plaintiffs argue that this lack of competition in the iOS tap-to-pay market is bad news for consumers and that Apple's monopoly is due to its exclusive control of the iPhone's NFC reader.
Judge partially denies Apple's request to dismiss lawsuit
US District Judge Jeffrey White has partially denied Apple's bid to dismiss the proposed federal class action lawsuit. He sided with the credit unions, agreeing that iOS tap-to-pay is a separate market because QR code payment apps like Venmo are inconvenient and have limited functionality. Judge White also found it "plausible" that Apple has a monopoly and noted that the company charges "arbitrary and inflated fees" for payment processing.
Apple Pay's 'unlawful tying' claim dismissed
However, Judge White did dismiss the plaintiffs' claim that Apple Pay is "unlawfully tied" to Apple devices. He agreed with Apple's argument that this claim doesn't hold water since Apple Pay is free and not forced on users. But he did admit that the lack of NFC access for third-party apps seems anticompetitive.
EU deemed Apple Pay anticompetitive in 2022
This lawsuit follows a preliminary ruling by the European Union in 2022, which found Apple Pay to be anticompetitive due to its exclusive use of the iPhone's NFC reader. The EU has been investigating Apple's practices concerning iOS devices and mobile wallets ever since.
Billions at stake in class action lawsuit
The class action lawsuit is spearheaded by Illinois' Consumers Co-op Credit Union, Iowa's Affinity Credit Union, and GreenState Credit Union. With billions of dollars on the line, the outcome of this case could have major implications for Apple and the entire digital payments market. Apple and the credit unions will meet again in court on December 1.
