Lawsuit accuses Apple of antitrust violations over Apple Pay

July 18 (Reuters) – Apple Inc (AAPL.O) was sued on Monday in a class action lawsuit proposed by payment card issuers accusing the iPhone maker of abusing its market power over devices phones to thwart competition for its Apple Pay mobile wallet.

According to a lawsuit filed in federal court in San Francisco, Apple “forces” consumers who use its smartphones, smartwatches and tablets to use its own wallet for contactless payments, unlike manufacturers of Android-based devices that allow consumers to choose wallets such as Google Pay and Samsung Pay.

The plaintiff, Affinity Credit Union of Iowa, said Apple’s anticompetitive conduct forces the more than 4,000 banks and credit unions that use Apple Pay to pay at least $1 billion in overage fees annually for the privilege.

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He also said Apple’s conduct minimized the incentive for the Cupertino, Calif.-based company to improve how Apple Pay works and make it more resilient to security breaches.

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

The lawsuit seeks unspecified treble damages and a halt to Apple’s alleged anti-competitive conduct.

Apple did not immediately respond to requests for comment.

The company is already facing a hefty fine after European Union regulators said on May 2 that it abused its dominance in iOS devices and mobile wallets by refusing to give its payment rivals access to its technology. Read more

According to the complaint, Apple charges issuers a 0.15% fee on credit transactions and a flat 0.5 cent fee on debit transactions using Apple Pay, while Android-based rivals charge nothing.

The plaintiff is represented by the law firms Hagens Berman Sobol Shapiro and Sperling & Slater.

Last August, they helped secure a $100 million settlement for small iOS developers who claimed Apple had overcharged them on commissions. Read more

The case is Affinity Credit Union v Apple Inc, US District Court, Northern District of California, No. 22-04174.

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Reporting by Jonathan Stempel in New York Editing by Matthew Lewis

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