Hagens Berman: Apple Sued in Massive Antitrust Class Action Over Alleged $1 Billion in Illegal Annual Revenue from Apple Pay Fees – Business Wire | Hot Mobile Press

SAN FRANCISCO–(BUSINESS WIRE)–A class-action lawsuit was filed against Apple today, accusing the company of illegally profiting from payment card issuers through its Apple Pay policies and allegedly collecting up to $1 billion annually in fees in violation of federal antitrust laws, it said Hagens Berman and Sperling & Slater’s attorneys.

The lawsuit seeks to represent a class of US credit unions and financial institutions that issue payment cards enabled for use in Apple Pay. The class action lawsuit, filed in the US District Court for the Northern District of California, alleges that Apple denied competitors access to the technology needed to develop a competing mobile wallet. On iOS devices, Apple has ensured that only its Apple Pay mobile wallet can make contactless payments at the point of sale. After Apple secured a monopoly over Apple Pay in this way, Apple is charging card issuers that use Apple Pay competitive fees for a service that’s available for free on Android devices, the lawsuit says.

If you issue payment cards that are enabled for use with Apple Pay, learn more about this issue and your rights against Apple.

“When you compare the functionality of Apple Pay to mobile wallets available on Android devices – Google Pay, Samsung Pay – you are essentially holding up a mirror; they are essentially identical,” said Steve Berman, co-founder and managing partner of Hagens Berman. “Yet the same service on Android that card issuers pay absolutely nothing for costs them a combined $1 billion annually through Apple Pay.”

“The reason for this is simple,” added Berman. “There is competition on Android devices with multiple wallets offering contactless payments, while Apple has banned all competitors, making Apple Pay the only option.”

This is the third time the firm has sued the big tech giant over antitrust matters. In 2015, Hagens Berman won a combined $560 million settlement against Apple and publishers over e-book price fixing after Apple appealed the case to the US Supreme Court, and in 2022 it won Company on behalf of iOS settles $100 million developers harmed by Apple’s stifling App Store policies.

“As a company with a long history of antitrust success, we’re no stranger to Apple’s monopolistic behavior,” Berman said. “We’re hoping for a hat-trick and believe the economic evidence our team has gathered in this case against Apple is frankly indisputable. We look forward to fighting this case.”

The devil of Apple Pay is in the details

The lawsuit details Apple Pay’s competitive fee structure compared to other mobile wallet providers in the market, as well as Apple’s tactics to incorporate Apple Pay into its existing structure of dominance in the mobile device industry.

On all Android devices and supported mobile wallets on this operating system, issuers pay nothing to use the decades-old technology that enables tap-and-pay functionality across Android platforms. Meanwhile, Apple Pay is the only approved mobile tap-and-pay wallet on all iOS devices thanks to Apple’s lockout practices. Through Apple Pay, Apple charges US card issuers 15 basis points on deposit and 0.5 cents on debit for all transactions.

“On the surface, the Apple Pay fees charged to card issuers might seem small, but the devil is really in the details of Apple’s policies, and those fees add up in a big way,” Berman said.

To illustrate the importance, the lawsuit states: “Apple’s ability to profitably maintain its substantial issuer fees despite other free forms of payment demonstrates that a hypothetical monopolist can (and could) profitably impose a small but significant non-transitory increase.” in price (a SSNIP).”

Lawyers say that to make matters worse for payment card issuers, Apple is enforcing the same fees on e-commerce transactions as well, preventing issuers from taking Apple Pay’s e-commerce feature from tap-and-play. Disable pay function. Apple also prohibits issuers from passing these fees on to consumers, which they could do without Apple’s guidelines to incentivize the use of lower-cost forms of payment.

According to the lawsuit, the antitrust violations come in two forms:

  1. Apple unlawfully linked two of its products — mobile devices and its proprietary mobile wallet — forcing iOS users to use Apple Pay exclusively and shutting out competing tap-and-pay options.

  2. Apple unlawfully monopolizes the tap-and-pay mobile wallet market on iOS. While issuers pay $0 when their cardholders use Android wallets and pay $0 when their cardholders use contactless cards, Apple rakes in billions of dollars in fees from tap-and-pay payments on its platform.

The lawsuit seeks to reimburse payment card issuers who were charged Apple Pay fees and seeks an injunctive relief to end Apple’s policies.

Learn more about the antitrust class action lawsuit against Apple on behalf of payment card issuers subject to Apple Pay policies.

About Hagens Berman

Hagens Berman is a global plaintiffs’ complex litigation firm with a relentless pursuit of real results for those harmed by corporate negligence and fraud. Since its inception in 1993, the firm’s determination has garnered numerous national awards, accolades and titles as the Firm’s Most Feared Plaintiffs, MVPs and Class Action Innovators. To learn more about the firm and its accomplishments, visit www.hbsslaw.com. Follow the company for updates and news at @ClassActionLaw.

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