February 8, 2023


A proposed class action lawsuit against Apple Pay alleges that Apple illegally monopolized contactless payments on the iPhone, allowing it to force card issuers to pay fees (pass Bloomberg). The lawsuit was filed by Iowa-based Affinity Credit Union, which issues Apple Pay-compatible debit and credit cards, but the company’s lawyers want to make it a class action case so other card issuers can join the lawsuit.

According to the complaint, which you can read in its entirety below, Apple charges credit card companies more than 0.15% per year for Apple Pay, but these card issuers pay nothing. Customers use “an Android wallet with the same functionality”. The lawsuit accuses Apple of violating antitrust laws by making Apple Pay the only service that enables NFC payments on its iPhones, iPads and Apple Watches. It also said that Apple prevented card issuers from passing those fees on to customers, giving iPhone users no incentive to look for cheaper payment methods.

as we are Epic v. Apple At trial, such a case may depend on the judge’s judgment on the relevant market — here, the plaintiffs claim that Apple has a monopoly on “Tap and Pay iOS mobile wallets.” But even if the judges agree that this is true, they can still decide that there is no real monopoly because customers can always switch to Android where other mobile wallets exist.

A lawsuit does not automatically grant class action status—a judge must decide whether to grant it. However, Hagens Berman, the law firm that handled the case for Affinity, has some track record in class action lawsuits against Apple. It involved a $100 million settlement for developers after claims the App Store’s rules were unfair, and an e-book pricing case that ended in Apple returning about $400 million to customers.

the purpose of the lawsuit, according to Press release From the law firm is a change to Apple’s policy that forces all contactless payments to go through Apple Pay, and requires the company to reimburse the card issuer for fees that plaintiffs claim it illegally charged.

That’s not the only challenge Apple faces in how Apple Pay works. The European Union recently pushed back against the fact that third-party developers can’t use the iPhone’s NFC system for payments, claiming that the restrictions have resulted in “a reduction in innovation and consumer choice for iPhone mobile wallets.” Now, the company could also face a legal battle over the issue in the United States.

Apple did not immediately respond edgeA request for comment on the case.



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