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Apple Card Payment. (Photo: Apple, Inc.)The $137 million Affinity Credit Union in Des Moines, Iowa, is the first plaintiff named in a proposed class action antitrust lawsuit against Apple, the world’s largest technology company.
Affinity is one of 5,480 financial institutions worldwide that issue payment cards through Apple Pay and is violating federal antitrust laws because it has 100% market control over the tap-and-pay iOS mobile wallet, according to attorneys at the Hagen Berman law firm. in San Francisco. It bills itself as a global class-action and complex plaintiffs litigation law firm.
The lawsuit seeks to represent the U.S. Department of Credit Unions and other financial institutions that use payment cards enabled for use in Apple Pay. The proposed class action lawsuit was filed July 18 in the U.S. District Court for the Northern District of California in San Jose.
Unlike other digital wallets available on Android devices, such as Google Pay and Samsung Pay, Apple wants users of its mobile devices to use its mobile wallet, Apple Pay, without competitors offering similar services.
Lawyers have accused Apple of illegally tying Apple Pay to its mobile devices — iPhones, iPads and Apple Watches — by preventing third parties from tapping and making payments on those devices using NFC technology, demanding that Apple Pay be used for all taps and apps. Mobile wallet transactions. As of Q1 2022, Apple’s iPhone will account for 51% of the smartphone market and the iPad will account for 54% of the tablet market as of June 2022.
On iOS devices, Apple has confirmed that only its mobile wallet, Apple Pay, can make contactless payments at the point of sale.
The tech giant charges card issuers who use Apple Pay for a service that’s available for free on Android devices, lawyers say. Legal research site Legal Insider defines ultra-competitive prices as prices higher than those found in a normal competitive context.
Every time an Apple Pay transaction is completed on a US-issued card, the issuer must pay Apple a fee of 15 basis points on credit cards and five cents on debit cards. These fees reportedly earn Apple $1 billion a year, and this Android wallet service costs payment card issuers $0. This revenue stream – which is entirely earned on the backs of issuers – is predicted to quadruple by 2023, according to the lawsuit.
Lawyers say Apple imposes these same fees on e-commerce transactions, preventing issuers from disabling Apple Pay’s tap-and-pay e-commerce functionality. Apple prohibits issuers from passing these fees on to consumers.
“On the surface, Apple Pay may seem like a small push on card issuers, but in reality the devil is in the details of Apple’s policies, and these fees add up big time,” said Steve Berman, founder and managing partner of Hagen Berman. He said in a prepared statement.
The lawsuit seeks injunctive relief to stop Apple Pay and Apple’s policies against the payment card issuers that were sued.
This is the third time the company has sued the tech giant for antitrust.
In the year In 2015, Hagens Berman won a combined $560 million settlement against Apple and publishing companies regarding the pricing of e-books after Apple appealed the case to the United States Supreme Court. Developers affected by Apple’s App Store policies.
Apple did not respond. CU TimesRequest for comment on Friday.
Read the lawsuit, Affinity Credit Union v. Apple Inc., Case No.: 5:22-cv-04174.
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