Banks and credit unions that paid Apple fees on Apple Pay transactions can now be represented together in a class action lawsuit against Apple. A U.S. federal judge has certified a class covering eligible U.S. card issuers, moving the case forward on behalf of those entities.
The lawsuit, filed in 2022, accuses Apple of limiting competition in mobile payments by restricting access to the iPhone’s NFC chip and making Apple Pay the only tap-to-pay option available on the iPhone at the time.
What The Apple Pay Lawsuit Claims
The lawsuit claims Apple uses its control over the iPhone’s NFC technology to prevent competing mobile wallets from offering contactless payments.
According to the complaint, Apple charges card issuers a 0.15% fee on credit card transactions made through Apple Pay and half a cent for debit card transactions. A $1,000 credit card purchase through Apple Pay would therefore result in a $1.50 fee paid by the card issuer.
The plaintiffs claim Apple’s fees from Apple Pay transactions can add up to as much as $1 billion per year.
Banks And Credit Unions Are Covered By The Class
U.S. District Judge Jeffrey White certified a class covering U.S. entities that issued payment cards enabled for Apple Pay and paid Apple a fee for transactions made with those cards.
The class includes eligible banks, credit unions and other card issuers. Instead of bringing separate cases over the same alleged conduct, the claims can now proceed together as part of the certified class.
Judge White also denied Apple’s request to exclude expert testimony that the plaintiffs say supports their claim that Apple has monopoly power in the mobile wallet market.
Why The Lawsuit Focuses On NFC
The iPhone’s NFC chip is central to the case because it handles the short-range wireless communication used for contactless payments.
The plaintiffs argue that Apple prevented competing mobile wallets from accessing the technology, leaving Apple Pay as the tap-to-pay option on iPhone when the lawsuit was filed. They argue that this gave Apple the ability to charge card issuers fees that would not be possible under a more open system.
The complaint points to Android as a comparison. Android devices can support multiple mobile wallet services for contactless payments, and the plaintiffs say those services do not operate under the same fee arrangement alleged in the Apple case.
Apple Has Since Opened Access To NFC
Apple’s NFC policies have changed since the lawsuit was filed.
Starting with iOS 18.1, developers gained access to NFC functionality for contactless payments in their apps. Apple has made that access available in the United States, Canada, Australia, Brazil, Japan, New Zealand, the United Kingdom, the European Economic Area and other countries.
That means competing payment apps can now use iPhone NFC in supported markets. The lawsuit, however, concerns Apple’s policies and the fees paid by card issuers during the period covered by the case.
What The Card Issuers Are Seeking
The plaintiffs are seeking repayment of the fees that eligible card issuers paid to Apple. They are also asking the court for an injunction that would prevent Apple from continuing the policies challenged in the lawsuit.
The latest ruling does not determine whether Apple violated antitrust law. It establishes that the claims covered by the certified class can proceed together.
The case will now continue as the plaintiffs pursue their claims against Apple’s mobile payment practices.
(via Business Wire)
