Apple hit with lawsuit over anti-competitive behaviour through Apple Pay 

Apple is being sued over its Apple Pay system and accused of anti-competitive behaviour by stifling competition from other payment apps.

The class action complaint filed yesterday in a California court by payment card credit union Affinity Credit Union alleges that the iPhone maker used its market power to resist competition from other payment apps.

The complaint said that Apple requires mobile device customers to also acquire its mobile wallet Apple Pay and “prevents consumers from using competing mobile wallets capable of offering competing tap and pay solutions.”

The complaint said Apple “coerces” consumers to use Apple Pay with potential Apple Pay rivals barred, contrasting Apple’s behaviour with that of Google Pay and Samsung Pay on Android devices, which give consumers greater choice of competing wallets offering payment services.

Apple was accused of attempting to “obtain a monopoly in the market for Tap and Pay iOS Mobile Wallets, with the effect being that competition is foreclosed and that consumer choice is gravely diminished,” according to the complaint.

The lawsuit also said that without any competition, Apple charges credit card issuers 0.15% on transactions, and debit card issuers 0.5 cents on debit transactions.

“Apple’s conduct harms not only issuers, but also consumers and competition as a whole,” the complaint claimed. 

The plaintiff said that as a participating financial institution, it has to pay Apple’s “supracompetitive” issuer transaction fees on each Apple Pay transaction that is processed using an Affinity issued payment card. 

Apple did not immediately respond to City PM’s request for comment.