Apple sued over Apple Pay payment system

Apple pays on an iPhone

Apple has been the subject of a lawsuit in the United States over Apple Pay.

The tech giant is accused of using its market power in the mobile phone industry to fend off competition from other payment card issuers.

The class action complaint was filed in California federal court by Affinity Credit Union, an Iowa-based chartered credit union.

Apple did not immediately respond to the BBC’s request for comment.

According to the complaint, Apple “forces” consumers who use its smartphones, smartwatches and tablets to use its own wallet for contactless payments, unlike manufacturers of Android-based devices that allow consumers to choose wallets, such as Google Pay and Samsung Pay.

The complaint alleges that Apple is preventing consumers from using competing mobile wallets capable of offering competing tap and pay solutions.

Iowa’s Affinity Credit Union said Apple’s anticompetitive conduct is forcing the more than 4,000 banks and credit unions that use Apple Pay to pay at least $1 billion in overage fees a year for the privilege.

He also said Apple’s conduct downplayed the California-based company’s incentive to improve how Apple Pay works and make it more resilient to security breaches.

“Apple’s behavior harms not only issuers, but also consumers and competition as a whole,” Affinity Credit Union said.

“If Apple faced competition, it could not bear these substantial costs.”

The lawsuit seeks unspecified damages and a halt to Apple’s alleged anticompetitive conduct.

Apple logo on the phone

Apple logo on the phone

Apple is already facing a hefty fine after European Union regulators said on May 2 that it abused its dominant position in iOS devices and mobile wallets, by refusing to give its payment rivals access. to its technology.

According to the complaint, Apple charges issuers a 0.15% fee on credit transactions and a flat 0.5 cent fee on debit transactions using Apple Pay, while Android-based rivals charge nothing.

The plaintiff is represented by the law firms Hagens Berman Sobol Shapiro and Sperling and Slater.

Last August, they helped secure a $100 million settlement for small iOS developers who claimed Apple had overcharged them on commissions.

Discussing the European Union’s investigation into Apple’s mobile payment policies in May, the bloc’s digital chief, Margrethe Vestager, said Apple had claimed it could not provide access to the NFC for security reasons.

In Europe, most in-store payments made with a mobile phone rely on a wireless technology called “Near Field Communication” – NFC.

This functionality enables communication between a customer’s mobile phone and the store’s payment terminal, thus enabling “tap and go”.

“Our investigation to date has not uncovered any evidence that would indicate such a high security risk,” Vestager said. on the EU website.

“To the contrary, the evidence in our filing indicates that Apple’s conduct cannot be justified by security concerns.”

Google Play Logo

Google Play Logo

Allegations that Google overcharged millions of app users in the UK are also set to be tried.

The lawsuit is brought by consumer campaigner Liz Coll on behalf of nearly 20 million UK users of Google’s Play Store.

Its aim is to compensate UK users of Android smartphones and tablets for years of alleged overcharging by Google and infringement of competition law.

She said: “We are confident that our claim is good.

“Google Play Store’s imposition of a 30% block charge on our digital purchases is unlawful and unjustifiable, and we look forward to making the case for UK consumers at trial.”

Google said it would defend the claim.


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Elaine R. Knight