Apple receives a court order forcing it to address the antitrust class-action lawsuit
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US tech giant Apple was told by a US judge that it must face an antitrust lawsuit filed by card issuers who accused the company of standing in the way of competitors to its Apple Pay wallet.
The order came from the US District Judge Jeffrey White, who allowed the plaintiffs to try to prove that the company violated the US federal Sherman antitrust law. The complaint against Apple is actually not new, as it was filed back in 2022.
However, the matter that it addresses still remains relevant to date. In the complaint, the plaintiffs have accused Apple of preventing rivals from accessing NFC chip technology used to create iPhones, which is also needed to create mobile wallets. In doing so, Apple is effectively blocking the rise of any competitor, as card issuers argue.
Their problem is that Apple Pay allows users to make contactless payments at the point of sale — a feature that has been very popular since it emerged. But, if no other company can do so, that means that Apple is effectively coercing customers into only using its product if they want access to this feature, according to the filing.
The lawsuit also said that by preventing competitors from accessing the chips, Apple secured a monopoly, and so it can afford to charge card issuers who use Apple Pay supracompetitive fees for a service that Android devices offer for free. Thanks to this policy, Apple has been able to extract up to $1 billion dollars per year by charging over 4,000 banks and credit unions.
Attorneys at Hagens Berman and Sperling & Slater, who represent the Affinity Credit Union of Iowa, argue that this is a violation of the antitrust law.
Other entities went after Apple over the same policy
Since the filing of the complaint, Apple managed to get a “tying” claim — which accused the company of forcing iOS users to buy Apple Pay or give up on purchases using competing wallets — dismissed. However, the matter was not dropped. The European Commission charged the company with restricting access to the chips in 2022, as well.
As the matter continued to grow, some had speculated that this course of action could end up costing Apple billions of euros in fines that it might potentially receive in European nations.
More recently, Apple also saw a conflict with the Consumer Financial Protection Bureau over the same matter. In other words, multiple entities have expressed their dissatisfaction with the company’s behavior and policy which is not only preventing the rise of healthy competition, but is also costing the banks massive amounts of money.
