TECHNOLOGY
Judge Certifies Class Action Letting Banks Sue Apple Over Apple Pay Fees
A federal judge has cleared the way for banks and credit unions to jointly sue Apple, alleging the company uses its iPhone NFC chip control to charge card issuers monopoly-level fees.
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A federal judge has certified a class action lawsuit that accuses Apple of blocking competition in the tap-to-pay market, clearing the way for banks and credit unions across the United States to jointly pursue claims against the company.
U.S. District Judge Jeffrey White this week ruled that the class will include any U.S. entity that issued a payment card enabled for Apple Pay and paid Apple a fee on transactions made with that card. The judge also rejected Apple's bid to exclude expert testimony that plaintiffs say demonstrates Apple holds monopoly power over the mobile wallet market.
The lawsuit, first filed in 2022, alleges that Apple has used its exclusive control over the iPhone's near-field communication (NFC) chip to shut out rival mobile wallet services, preventing them from offering competing tap-to-pay options. By restricting access to that hardware, plaintiffs argue, Apple has cornered card issuers into paying it directly whenever a customer uses Apple Pay.
According to the complaint, Apple charges card issuers a fee of 0.15 percent on credit card transactions and half a cent on debit card transactions made through Apple Pay. That means a $1,000 purchase made with Apple Pay nets Apple roughly $1.50 from the issuing bank. Plaintiffs estimate these fees generate close to $1 billion a year for Apple.
With class certification now granted, banks and credit unions that issued Apple Pay-enabled cards and paid these fees can proceed together rather than filing individual suits, significantly raising the financial stakes for Apple as the case moves forward.