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July 20, 2022

Apple faces antitrust lawsuit in US for levying excessive Apple Pay fee

Tech giant Apple is facing a class action antitrust lawsuit in the US for allegedly imposing exorbitant fee on payment card issuers through its Apple Pay mobile wallet.

The lawsuit was filed by Affinity Credit Union (ACU) at the San Francisco federal court, reported Reuters.

In its complaint, the ACU alleged that around 4,000 banks and credit unions, who are using Apple Pay, were paying at least $1bn of excess fees per year for using the platform.

Attorneys at Hagens Berman and Sperling & Slater, who are representing ACU, said that the practice is in violation of US federal antitrust law.

The lawsuit also accuses Apple of forcing the users of its smartphones, smartwatches and tablets to use its own wallets for payments, refusing its rivals access to develop a competing mobile wallet.

Apple has made sure that consumers will use Apple Pay only to make contactless payments across its iOS devices, thereby securing monopoly in the segment to charge the card issuers who use the service.

According to the complaint, such service is available for free on Android devices.

Hagens Berman co-founder and managing partner Steve Berman said: “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.

“And yet, the same service on Android that card issuers pay absolutely nothing for costs them a collective $1bn annually through Apple Pay.”

Berman further added: “The reason for this is simple. 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 latest lawsuit represents the third case in which Hagens Berman has sued Apple for antitrust violations.

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