A proposed class action lawsuit filed against Apple today accuses the company of violating U.S. antitrust law by ensuring that Apple Pay is the only available mobile wallet for making tap-to-pay payments with an iPhone, iPad, or Apple Watch.
The complaint, filed by law firms Hagens Berman and Sperling & Slater, alleges that Apple is illegally profiting at least $1 billion annually by blocking rivals from accessing NFC technology on its devices, thereby preventing competing services like Google Pay or Samsung Pay from offering tap-to-pay payment functionality on Apple devices.
For every Apple Pay transaction completed with a U.S. issuer’s payment card, the issuer must pay Apple a fee of 0.15% for credit cards and half a cent for debit cards, the complaint alleges. By comparison, Google allows multiple mobile wallets on Android smartphones and does not collect a fee from U.S. card issuers for tap-to-pay payments.
“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.”
Apple would not be able to sustain its “substantial fees” for Apple Pay transactions if the service faced competition on Apple devices, the complaint argues.
Filed in U.S. district court in Northern California, the complaint specifically accuses Apple of multiple violations of the federal Sherman Act by “tying” Apple Pay to its mobile devices and monopolizing the “tap and pay iOS mobile wallet market.”
The complaint seeks monetary relief for all U.S. card issuers that paid Apple a fee for any Apple Pay transaction made with any of its payment cards.
Hagens Berman said this is the third time it has sued Apple for antitrust violations. In 2015, the law firm secured a combined $560 million settlement against Apple and publishing companies regarding price fixing of e-books, and earlier this year it secured a $100 million settlement from Apple on behalf of iOS developers who alleged that Apple’s then-standard 30% commission on App Store purchases was excessive.
Apple Pay has faced similar scrutiny in other regions, including Australia and Europe. In May, the European Commission informed Apple of its preliminary view that it abused its dominant position in the “mobile wallets on iOS devices” market by limiting access to NFC technology on Apple devices for contactless payments in stores.
The full complaint is available in PDF format on the Hagens Berman website.
Tuesday May 3, 2022 1:59 pm PDT by Juli Clover
Apple Pay competitor PayPal played a role in the EU’s decision to target Apple with antitrust complaints about its mobile wallet, reports Bloomberg. PayPal was one of “multiple companies” that filed informal complaints about the way Apple restricts third-party apps from accessing the NFC capabilities of the iPhone, which in turn led to the European Commission issuing a Statement of Objections…
Starting with iOS 16, iPadOS 16, macOS Ventura, and watchOS 9, Apple Pay will allow users to pay multiple merchants in a single transaction within supported apps. Apple says this feature will let users make a bundled purchase, such as a travel package with flights, a rental car, and a hotel room, all in a single Apple Pay payment sheet.
Apple Pay has also received a redesign on macOS…
Tuesday June 7, 2022 12:54 am PDT by Sami Fathi
During WWDC yesterday, Apple announced it will be launching Tap to Pay on iPhone this month, allowing small merchants and independent sellers in the United States to use their iPhone as a payment terminal.
Announced in February, the feature allows compatible iPhones to accept payments via Apple Pay, contactless credit and debit cards, and other digital wallets, with just an iPhone.
Tap to …
Wednesday June 8, 2022 1:29 pm PDT by Juli Clover
Alongside iOS 16 and macOS Ventura, Apple announced the upcoming launch of a new Apple Pay Later feature, which is designed to allow customers to split Apple Pay purchases into multiple payments.
With Apple Pay Later, Apple Pay users can choose to make four payments spread over a six week period instead of paying up front. The Apple Pay Later feature includes no interest or fees so long as…
Friday March 25, 2022 1:41 pm PDT by Juli Clover
Apple this week suspended its Apple Pay service for the Mir card payment system in Russia, effectively closing a loophole that had allowed Russians to continue to use the Apple Pay service.
According to Reuters, Mir had remained connected to Apple Pay even after Apple restricted the use of the payments service in Russia on March 1 for Mastercard and Visa cardholders.
Monday May 2, 2022 4:13 am PDT by Eric Slivka
In line with a report late last week, the European Commission today officially announced that it has issued a Statement of Objections to Apple over its restrictions that prevent third-party services from accessing the NFC capabilities of the iPhone, thereby restricting competition in mobile wallets on iOS.
The statement is a preliminary view that will need to be confirmed with further…
Only six percent of iPhone users in the United States who have Apple Pay set up actually use the feature, according to a detailed study by PYMNTS.
Seven years after Apple Pay launched in September 2014, 93.9 percent of consumers with Apple Pay activated on their iPhone do not use it to pay for in-store purchases, meaning that only 6.1 percent do.
In 2015, the year following Apple Pay’s…
Friday July 15, 2022 2:22 pm PDT by Juli Clover
Happy MacBook Air launch day! Today is the official debut date of the new M2 MacBook Air, which features the first major redesign to the MacBook Air in a decade. We picked up one of the new M2 MacBook Air machines and decided to do a hands-on video where we answer questions from MacRumors readers.
Subscribe to the MacRumors YouTube channel for more videos. The M2 MacBook Air no longer has a…
Apple is working on a new Mac Pro with an M2 “Extreme” chip, according to a recent report from Bloomberg’s Mark Gurman.
The Mac Pro is one of the last Intel-based Mac models still on sale, and a version with Apple silicon has been now anticipated for over two years. At its “Peek Performance” event earlier this year, Apple even teased the launch of the Apple silicon Mac Pro, saying “that’s…
If you’ve been waiting since last month for a chance to try out iOS 16 and all of Apple’s other upcoming operating system updates without needing a developer account, now’s your chance, as Apple has launched public betas for all of the updates.
This week also saw the launch of the redesigned M2 MacBook Air, the official end to the working relationship between Apple and Jony Ive, and a couple …
Apple this week added the Apple TV HD with the original Siri Remote to its vintage products list. The device became vintage on June 30, according to an internal memo obtained by MacRumors, but the public-facing list was only updated recently.
When the Apple TV HD was first released in 2015, it came with a first-generation Siri Remote without a white ring around the Menu button — only units …