Apple Pay fees are now at the centre of a major legal battle in the United States, after a federal judge certified an antitrust lawsuit brought by thousands of banks and credit unions as a class action. The decision allows the financial institutions to pursue their claims collectively rather than through separate cases.
The lawsuit accuses Apple of blocking competing tap-to-pay wallets on the iPhone while charging card issuers fees for transactions processed through its own service. The institutions argue that Apple was able to impose these charges precisely because rival wallets could not compete for contactless payments on the device.
What the ruling covers
Judge Jeffrey White certified the class on 23 September and rejected Apple’s attempt to exclude the plaintiffs’ damages expert. The class action certification is a procedural step and does not determine whether Apple breached antitrust law or owes any money to the card issuers. Those questions remain to be decided as the case proceeds.
By grouping the claims together, the ruling consolidates the position of thousands of US banks and credit unions into a single proceeding. This gives the financial institutions a unified route to challenge the fees they say they have been paying to use the service.
How the fees are structured
According to the credit unions’ lawsuit, card issuers pay Apple 0.15% of the value of credit card purchases made through the service, along with half a cent for each debit transaction. For example, a credit card purchase of roughly £75 processed through the service would cost the card issuer around 11 pence in fees.
The antitrust claims focus on the interaction between these charges and the restrictions placed on competing digital wallets. The institutions contend that limiting access to tap-to-pay functionality on the iPhone allowed Apple to sustain the fee structure without competitive pressure from alternative payment services.
The lawsuit centres on iPhone contactless payments and the fees tied to them. With class certification now in place, the dispute moves forward as a single consolidated action representing the affected banks and credit unions across the United States.
Source
Image: appleinsider.com
