Apple Pay antitrust lawsuit will go ahead despite Apple trying to dismiss it
In this lawsuit, we’ve got three credit unions suing the Cupertino company, claiming it is a 100% monopoly on mobile wallets on iPhones and Apple Watches. This is by far an old issue, although the lawsuit is new. Apple has been accused of holding a monopoly with other of its services as well. And it’s also had multiple lawsuits for Apple Wallet as well.All of the various antitrust cases concentrate on the fact that Apple doesn’t let other mobile wallet apps access the NFC chip that’s present in iPhones and Apple Watches. All in all, this means you can make contactless transactions only using Apple Wallet on iPhones and Apple Watches.
All this means that if any bank or credit union (or any other financial institution) wants their cardholders to be able to make contactless payments with iPhone or Apple Watch, they need to sign up to Apple Pay. And of course, Cupertino charges a fee on each transaction.
The EU has also been investigating the issue as a potential antitrust violation since 2019.
On the other hand, Apple’s defense against this is claiming this is irrelevant as people are free to use physical cards to make contactless payments. The company also highlights other mobile wallet options like QR codes.
However, you can clearly see where this can be problematic, given the fact people would generally prefer to avoid the hassle of paying with a physical card when they can pay with their phone. Also, physical cards have payment limits (you can pay up to a certain amount) while Apple Pay doesn’t have such.
This lawsuit, as we mentioned above, is led by three US credit unions: Illinois’ Consumers Co-op Credit Union, Iowa’s Affinity Credit Union, and GreenState Credit Union. Apple tried to dismiss the case with the arguments we indicated above, but the judge decided to case would move forward.
The complaint also states banks and credit unions that use Apple Pay are forced to pay at least $1 billion of excess fees. We’ll see how this lawsuit will go, but for now it’s far too early to give any predictions. Just like any other lawsuit of this type, we can for sure say that the issue won’t be resolved quickly, and the lawsuit might as well continue on for years.
