It’s no surprise that Apple Pay is only available on Apple devices. Now the company is being sued to prevent other players from offering their own payment systems. This is the third time Apple has been sued for violating US antitrust laws. The first time in 2015 was over e-book pricing. That lawsuit ended with a $560 million settlement against Apple. Earlier this year, Hagens Berman also obtained a $100 million settlement for developers who believed Apple’s 30 percent commission rate was unreasonably high.
The lawsuit was written by the law firms Hagens Berman and Sperling & Slater on behalf of all U.S. card issuers.
The European Commission has also taken aim at Apple. In May, it notified Apple of what is considered an abuse of market position. The objections were largely the same as now, namely that Apple had restricted the use of NFC, a widespread and widely used technical solution.
Contactless payments work through the device’s NFC technology. This is also true for Apple Pay, so nothing prevents using other providers’ solutions on Apple’s devices. The plaintiff, therefore, claims that Apple is violating U.S. antitrust law, which ensures healthy competitive conditions in the market.
Apple charges high fees for using Apple Pay. In the U.S., card issuers pay 0.15 percent of the amount when using credit cards and about half a cent for debit cards. That does not sound so outrageous, but by comparison, Google, for example, does not charge for using contactless payment systems on its Android devices. They also have no restrictions on which payment systems are allowed.
According to the plaintiffs, Apple earns about $1 billion a year by blocking other forms of payment on its devices – income it could not earn if it allowed competition.