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macrumors bot
Original poster
Apr 12, 2001
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A proposed class action lawsuit filed against Apple today accuses the company of violating U.S. antitrust law by ensuring that Apple Pay is the only available mobile wallet for making tap-to-pay payments with an iPhone, iPad, or Apple Watch.

Apple-Pay-Feature.jpg

The complaint, filed by law firms Hagens Berman and Sperling & Slater, alleges that Apple is illegally profiting at least $1 billion annually by blocking rivals from accessing NFC technology on its devices, thereby preventing competing services like Google Pay or Samsung Pay from offering tap-to-pay payment functionality on Apple devices.

For every Apple Pay transaction completed with a U.S. issuer's payment card, the issuer must pay Apple a fee of 0.15% for credit cards and half a cent for debit cards, the complaint alleges. By comparison, Google allows multiple mobile wallets on Android smartphones and does not collect a fee from U.S. card issuers for tap-to-pay payments.

"When you compare the functionality of Apple Pay to mobile wallets available on Android devices – Google Pay, Samsung Pay – you're essentially holding up a mirror; they are essentially identical," said Steve Berman, Hagens Berman co-founder and managing partner. "And yet, the same service on Android that card issuers pay absolutely nothing for costs them a collective $1 billion annually through Apple Pay."

Apple would not be able to sustain its "substantial fees" for Apple Pay transactions if the service faced competition on Apple devices, the complaint argues.

Filed in U.S. district court in Northern California, the complaint specifically accuses Apple of multiple violations of the federal Sherman Act by "tying" Apple Pay to its mobile devices and monopolizing the "tap and pay iOS mobile wallet market."

The complaint seeks monetary relief for all U.S. card issuers that paid Apple a fee for any Apple Pay transaction made with any of its payment cards.

Hagens Berman said this is the third time it has sued Apple for antitrust violations. In 2015, the law firm secured a combined $560 million settlement against Apple and publishing companies regarding price fixing of e-books, and earlier this year it secured a $100 million settlement from Apple on behalf of iOS developers who alleged that Apple's then-standard 30% commission on App Store purchases was excessive.

Apple Pay has faced similar scrutiny in other regions, including Australia and Europe. In May, the European Commission informed Apple of its preliminary view that it abused its dominant position in the "mobile wallets on iOS devices" market by limiting access to NFC technology on Apple devices for contactless payments in stores.

The full complaint is available in PDF format on the Hagens Berman website.

Article Link: Apple Sued for Blocking Tap-to-Pay Competitors on iPhone
 

GermanSuplex

macrumors 65816
Aug 26, 2009
1,419
29,709
So are the rules going to be no more exclusive features anymore? I admit, the laws surrounding these types of interoperability rules and standards are way out of my league, and I understand some things need to be more "open" and work with each other. But damn, it seems like everyone wants a piece of the Apple pie. It's hard to tell what is a frivolous cash grab and what has merit.
 

sw1tcher

macrumors 68040
Jan 6, 2004
3,299
8,005
For every Apple Pay transaction completed with a U.S. issuer's payment card, the issuer must pay Apple a fee of 0.15% for credit cards and half a cent for debit cards, the complaint alleges. By comparison, Google allows multiple mobile wallets on Android smartphones and does not collect a fee from U.S. card issuers for tap-to-pay payments.

In other words, Google's doing it wrong. 🤣
 

fmillion

macrumors regular
Jun 16, 2011
124
294
So are the rules going to be no more exclusive features anymore? I admit, the laws surrounding these types of interoperability rules and standards are way out of my league, and I understand some things need to be more "open" and work with each other. But damn, it seems like everyone wants a piece of the Apple pie. It's hard to tell what is a frivolous cash grab and what has merit.
They're not calling for Apple Pay to be available on other devices. So Apple Pay can still be an exclusive iOS feature. This isn't like iMessage or FaceTime where you really can only interact with other iOS users (at least while utilizing all of the functionality). Tap-to-pay is very straightforward, it's basically just your phone or watch emulating a tap-to-pay credit card from the perspective of the terminal. So I'm not sure what Apple can offer to make Apple Pay a better "exclusive" feature other than maybe some kind of built in purchase insurance (which basically all CC's already offer - and they're not charging enough for debit card transactions to make it viable for that side). If Google Pay truly is zero-fee, it definitely doesn't look too good for Apple to charge fees on top of the credit card processor fees.
 

Samplasion

macrumors member
Jul 7, 2022
95
167
I'm surprised it took this long for another attorney to give it a shot at making big bucks in one go.

Wonder when Ford users will sue GM that they cannot use GM parts or vice versa!!!!!!
It would happen if there were only Ford and GM cars in (in this case) the US. Since it's not the case, there's no antitrust violation here. Apples and oranges
 

symphony

macrumors 68000
Aug 25, 2016
1,902
2,216
Has there been any recent outcomes with previous antitrust issues towards Apple?
 

sw1tcher

macrumors 68040
Jan 6, 2004
3,299
8,005
I imagine that there will be some kind of lawsuit due to the fact I can’t use my Mastercard to pay in a Visa only outlet? Unlikely because - you know. Apple.
That's not even a close analogy to what this is about.

Other payment apps are being prevented from accessing the NFC chip to make tap-to-pay payments. Instead, in the case of PayPal, you have to open the PayPal app then have it generate a QR code that you scan. Not as easy and convenient as Apple Pay where you just have to hold your iPhone next to payment terminal.

Let's replaced access to NFC chip with access to the iPhone's camera. What if Apple blocked other apps (Instagram, your banking app that allows for mobile check deposits, etc) from accessing the camera? Would you be okay with that?
 

cupcakes2000

macrumors 68040
Apr 13, 2010
3,018
3,735
And lose the other features of iPhone.
What - you mean I have to buy a something off a specific vendor to use their specific features?! Gosh. That’s a new concept. Oh wait its not new. In fact - it’s completely normal. That’s how a product works. You buy it because if it’s features. Or else we have this bland situation whereby no one can offer something special for their own product.
 
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