Mike Peterson
Apple has been hit with a class action lawsuit alleging that its Apple Pay policies illicitly allowed it to extract more than $1 billion in fees from card issuers.
The complaint, lodged in the U.S. District Court for the Northern District of California on Monday, accuses the Cupertino tech giant of illegally profiting from pay card issuers and denying rivals access to the systems needed for a competing mobile wallet on iOS.
Hagens Berman, the law firm that successfully obtained a $450 million settlement from Apple over ebook price fixing, is representing the class, which is comprised of U.S. credit unions and financial institutions that have cards enabled for use in Apple Pay
"Having secured a monopoly for Apple Pay in this fashion, Apple charges card issuers who use Apple Pay supracompetitive fees for a service that is available on Android devices for free," the law firm representing the class said in a press release.
The lawsuit details the alleged "supracompetitive fee structure," as well as "tactics to weave Apple Pay into its existing structure of market dominance in the mobile device industry."
According to the lawsuit, Google Pay and Samsung Pay don't charge card issuers on transactions. Apple's fees amount to nearly $1 billion a year — a number expected to grow to $4 billion by 2023.
"On the surface, Apple Pay's fees pushed onto card issuers may seem small, but truly the devil is in the details of Apple's policies," Steve Berman, Hagens Berman co-founder and managing partner said. "These fees add up, big time."
Apple charges U.S. card issuers 15 basis points on credit card transactions and $0.05 on debit card transactions. The lawsuit also takes issue with the fact that Apple Pay is the only mobile wallet on iOS. It calls that part of Apple's "exclusionary practices."
As such, the complaint says that Apple is in violation of antitrust regulations, including the Sherman Act, which targets monopolies.
The lawsuit seeks to reimburse card issuers charged by Apple and place an injunction to end Apple's fees and alleged exclusionary policies, among other prayers for relief.
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Wesley Hilliard
AppleInsider Staff
Andrew Orr
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26 Comments
Don’t support Apple Pay then. There’s no rule that just because Android does it for free everyone else has to.
Among the last group of people I’ll ever have any sympathy are credit card companies.
JFC Apple is not a monopoly on this or any other issue. They are just looking for another “easy” pay day. If you don’t like the way iOS does things there are plenty of other options for you.
Filed in Northern California. Good chance Visa is one of the “financial institutions”
What utter bullshit. Typical, money-grabbing slime lawyer
One of the reasons Google does it for free is that they collect non-anonymous data on you and your purchasing patterns and sell it to make money. I don’t believe that Apple does this since Apple wallet transactions are anonymized.
Visa is part of the problem. They nickel and dime every transaction with their fees. The statement from our card processor shows the 20+ fees they charge per transaction. It adds up to between 1.5% to well over 3% with AMEX being the ultimate fleeced. Before we dropped their card they hit us for close to 4% on one of their rewards cards.