Another day, another lawsuit. A class-action lawsuit was filed today against Apple accusing the company of illegally profiting from payment card issuers through its Apple Pay policies, allegedly extracting up to US$1 billion annually in fees in violation of federal antitrust law, according to attorneys at Hagens Berman and Sperling & Slater.
The lawsuit seeks to represent a class of U.S. credit unions and financial institutions that issue payment cards enabled for use in Apple Pay. The class action was filed in the U.S. District Court for the Northern District of California and accuses Apple of denying rivals access to the technology needed to develop a competing mobile wallet.
On iOS devices, Apple has ensured that only its mobile wallet, Apple Pay, can make contactless payments at the point of sale. Having secured a monopoly for Apple Pay in this fashion, 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.
“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,” said Steve Berman, Hagens Berman co-founder and 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.. The reason for this is simple,” Steve Berman, Hagens Berman co-founder and managing partner. “There is competition on Android devices, with multiple wallets offering contactless payments, whereas Apple has barred all rivals, making Apple Pay the only option.”
The law firm seems to enjoy suing the tech giant. This is the third time the firm has sued the Big Tech giant for antitrust matters. In 2015, Hagens Berman secured a combined $560 million settlement against Apple and publishing companies regarding price-fixing of e-books after Apple appealed the case to the U.S. Supreme Court. In 2022, the firm achieved a $100 million settlement on behalf of iOS developers who were harmed by Apple’s stifling App Store policies.
