Apple Sued For Having A Monopoly On The iPhone’s Tap-to-Pay

A class-action lawsuit has been filed against Apple Pay. This lawsuit accuses Apple of allegedly having an illegal monopoly over contactless payments on iPhones, which forces card issuers to pay a certain fee. The lawsuit was filed by Affinity Credit Union, a company responsible for issuing debit and credit cards that are compatible with Apple Pay. Lawyers of the company have opted to turn the lawsuit into a class-action so more card issuers companies can join the fight against Apple.

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According to The Verge report, Apple makes over $1 billion yearly by charging credit card companies 0.15 per cent on every transaction as Apple Pay fees. The companies have identified that the case is different when their customers use Android wallets and don’t have to pay anything.

The lawsuit accuses tech giant, Apple of violating antitrust law by ensuring Apple Pay is the only service able to make NFC payments on its iPhones, iPads, and Apple Watches. This automatically puts iPhone users without any other cheaper alternative asides from Apple Pay.

Also, Apple prevented card issuers from passing the 0.15 per cent fee on every transaction to customers, making it so iPhone owners don’t have to go find any cheaper payment method. Reports say a similar antitrust issue ensued in the Epic Games lawsuit against Apple, where Apple Pay flexes monopoly on iOS devices for “Tap and Pay iOS mobile wallets” thereby restricting third-party app developers’ from carrying out NFC functions. But even if a judge agrees that’s true, they could still decide that there’s no real monopoly because customers can always switch to Android, where other mobile wallets exist which may be a decision dissatisfying to the plaintiff.

According to a press release, the objective of the lawsuit is to drive a change in Apple policies, the one that ensures all contactless payments go through Apple Pay. Also to ensure card issuers are reimbursed with the fees that have been charged illegally over time.

This is not the first time Apple is facing issues as regards how Apple Pay is run. Recently, the EU objected to the fact that third-party developers can’t use the iPhone’s NFC system for payments due to restrictions that lead to “less innovation and less choice for consumers for mobile wallets on iPhones.” Now, the company could face a long legal battle over the issue in the US as well.