Apple Sued for Blocking Tap-to-Pay Competitors on iPhone

A proposed class action lawsuit filed against Apple today accuses the company of violating U.S. antitrust law by ensuring that Apple Pay is the only available mobile wallet for making tap-to-pay payments with an iPhone, iPad, or Apple Watch.

Apple Pay Feature
The complaint, filed by law firms Hagens Berman and Sperling & Slater, alleges that Apple is illegally profiting at least $1 billion annually by blocking rivals from accessing NFC technology on its devices, thereby preventing competing services like Google Pay or Samsung Pay from offering tap-to-pay payment functionality on Apple devices.

For every Apple Pay transaction completed with a U.S. issuer's payment card, the issuer must pay Apple a fee of 0.15% for credit cards and half a cent for debit cards, the complaint alleges. By comparison, Google allows multiple mobile wallets on Android smartphones and does not collect a fee from U.S. card issuers for tap-to-pay payments.

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

Apple would not be able to sustain its "substantial fees" for Apple Pay transactions if the service faced competition on Apple devices, the complaint argues.

Filed in U.S. district court in Northern California, the complaint specifically accuses Apple of multiple violations of the federal Sherman Act by "tying" Apple Pay to its mobile devices and monopolizing the "tap and pay iOS mobile wallet market."

The complaint seeks monetary relief for all U.S. card issuers that paid Apple a fee for any Apple Pay transaction made with any of its payment cards.

Hagens Berman said this is the third time it has sued Apple for antitrust violations. In 2015, the law firm secured a combined $560 million settlement against Apple and publishing companies regarding price fixing of e-books, and earlier this year it secured a $100 million settlement from Apple on behalf of iOS developers who alleged that Apple's then-standard 30% commission on App Store purchases was excessive.

Apple Pay has faced similar scrutiny in other regions, including Australia and Europe. In May, the European Commission informed Apple of its preliminary view that it abused its dominant position in the "mobile wallets on iOS devices" market by limiting access to NFC technology on Apple devices for contactless payments in stores.

The full complaint is available in PDF format on the Hagens Berman website.

Related Roundup: Apple Pay

Top Rated Comments

ProfessionalFan Avatar
3 weeks ago
Are you able to use Apple Pay on competitor phones?
Score: 51 Votes (Like | Disagree)
Apple_Robert Avatar
3 weeks ago

Are you able to use Apple Pay on competitor phones?
Not that I am aware of. I think Apple has every right to only allow Apple Pay on their devices.
Score: 36 Votes (Like | Disagree)
GermanSuplex Avatar
3 weeks ago
So are the rules going to be no more exclusive features anymore? I admit, the laws surrounding these types of interoperability rules and standards are way out of my league, and I understand some things need to be more "open" and work with each other. But damn, it seems like everyone wants a piece of the Apple pie. It's hard to tell what is a frivolous cash grab and what has merit.
Score: 29 Votes (Like | Disagree)
icanhazmac Avatar
3 weeks ago

By comparison, Google allows multiple mobile wallets on Android smartphones and does not collect a fee from U.S. card issuers for tap-to-pay payments.
Because they are hoovering and selling your purchase history.
Score: 29 Votes (Like | Disagree)
NufSaid Avatar
3 weeks ago
You make an amazing product but are forced to allow your competitors to profit. Ugh....lawyers.

You have a choice - buy an android phone - more people do.
Score: 23 Votes (Like | Disagree)
cupcakes2000 Avatar
3 weeks ago

That's not even a close analogy to what this is about.

Other payment apps are being prevented from accessing the NFC chip to make tap-to-pay payments. Instead, in the case of PayPal, you have to open the PayPal app then have it generate a QR code that you scan. Not as easy and convenient as Apple Pay when you just have to hold your iPhone next to payment terminal.

Let's replaced access to NFC chip with access to the iPhone's camera. What if Apple blocked other apps (Instagram, your banking app that allows for mobile check deposits, etc) from accessing the camera? Would you be okay with that?
I frankly don’t care. I buy a product becuase of what it does. If it doesn’t do what I want it to do I buy something else. I certainly don’t sue a company to try to ensure I get what I want like a self entitled AH. It’s not like other options don’t exist. Don’t try to shoehorn an argument into a situation so it fits a narrative. The simple fact is that if an iPhone and by extension Apple, doesn’t offer what you want, then buy somewhere else.
Score: 21 Votes (Like | Disagree)

Related Stories

Apple Pay Feature

Apple Pay Promoted as More Secure Than Credit Cards in Three New Ads

Tuesday July 19, 2022 6:11 am PDT by
Apple today shared three new ads highlighting the security benefits of Apple Pay on the iPhone compared to physical credit cards. The short ads emphasize that physical credit cards can be stolen, used by anyone, and leave your card number exposed to other people. The message behind the ads is that all of these security risks with using credit cards can be avoided by using Apple Pay. Apple ...
Apple Pay Feature

PayPal Played Role in EU Antitrust Complaint About Apple Wallet

Tuesday May 3, 2022 1:59 pm PDT by
Apple Pay competitor PayPal played a role in the EU's decision to target Apple with antitrust complaints about its mobile wallet, reports Bloomberg. PayPal was one of "multiple companies" that filed informal complaints about the way Apple restricts third-party apps from accessing the NFC capabilities of the iPhone, which in turn led to the European Commission issuing a Statement of Objections...
apple pay later

Apple Pay Later Will Let You Pay for Purchases Through an Installment Plan With No Interest or Fees

Tuesday June 7, 2022 1:42 am PDT by
Later this fall, Apple Pay Later will let customers in the United States pay for online and in-app purchases through a six-week installment plan with no interest or fees. Previewed at WWDC, Apple Pay Later will let customers split a purchase into four equal payments paid over the course of six weeks. Apple Pay Later will include zero interest and no fees and will be available "everywhere...
apple pay bundled purchases

Apple Pay to Support Bundled Purchases, Receives Redesign on macOS Ventura

Wednesday June 8, 2022 9:19 am PDT by
Starting with iOS 16, iPadOS 16, macOS Ventura, and watchOS 9, Apple Pay will allow users to pay multiple merchants in a single transaction within supported apps. Apple says this feature will let users make a bundled purchase, such as a travel package with flights, a rental car, and a hotel room, all in a single Apple Pay payment sheet. Apple Pay has also received a redesign on macOS...
Apple Tap to Pay iPhone

Apple Launching Tap to Pay on iPhone This Month

Tuesday June 7, 2022 12:54 am PDT by
During WWDC yesterday, Apple announced it will be launching Tap to Pay on iPhone this month, allowing small merchants and independent sellers in the United States to use their iPhone as a payment terminal. Announced in February, the feature allows compatible iPhones to accept payments via Apple Pay, contactless credit and debit cards, and other digital wallets, with just an iPhone. Tap to ...
Apple Pay Later Quick Green Feature

Apple Using In-House Lending for New Apple Pay Later Feature

Wednesday June 8, 2022 1:29 pm PDT by
Alongside iOS 16 and macOS Ventura, Apple announced the upcoming launch of a new Apple Pay Later feature, which is designed to allow customers to split Apple Pay purchases into multiple payments. With Apple Pay Later, Apple Pay users can choose to make four payments spread over a six week period instead of paying up front. The Apple Pay Later feature includes no interest or fees so long as...
mir russia apple pay

Apple Closes Loophole That Allowed Mir Cardholders to Use Apple Pay in Russia

Friday March 25, 2022 1:41 pm PDT by
Apple this week suspended its Apple Pay service for the Mir card payment system in Russia, effectively closing a loophole that had allowed Russians to continue to use the Apple Pay service. According to Reuters, Mir had remained connected to Apple Pay even after Apple restricted the use of the payments service in Russia on March 1 for Mastercard and Visa cardholders. Russia's National...
Apple Pay Feature

EU Officially Objects to Apple Limiting Third-Party Access to Apple Pay NFC Capabilities

Monday May 2, 2022 4:13 am PDT by
In line with a report late last week, the European Commission today officially announced that it has issued a Statement of Objections to Apple over its restrictions that prevent third-party services from accessing the NFC capabilities of the iPhone, thereby restricting competition in mobile wallets on iOS. The statement is a preliminary view that will need to be confirmed with further...

Popular Stories

cook sept 2020 event

Gurman: Apple Preparing Pre-Recorded iPhone 14 and Apple Watch Series 8 Event

Sunday August 7, 2022 6:13 am PDT by
Apple has "started to record" its virtual September event, where it's expected to announce the upcoming iPhone 14 lineup, the Apple Watch Series 8, and a new "rugged" Apple Watch model, according to Bloomberg's Mark Gurman. Writing in his latest Power On newsletter, Gurman says the event, which is expected to take place in the early part of September, is already under production, implying...
iPhone 14 Lineup Feature Purple

Color Options for All iPhone 14 Models: Everything We Know

Monday August 8, 2022 3:59 am PDT by
The iPhone 14 and iPhone 14 Pro models are rumored to be available in a refreshed range of color options, including an all-new purple color. Most expectations about the iPhone 14 lineup's color options come from an unverified post on Chinese social media site Weibo earlier this year. Overall, the iPhone 14 and iPhone 14 Pro's selection of color options could look fairly similar to those of the ...
ios 16 beta 5 battery percent

iOS 16 Beta 5: Battery Percentage Now Displayed in iPhone Status Bar

Monday August 8, 2022 10:43 am PDT by
With the fifth beta of iOS 16, Apple has updated the battery icon on iPhones with Face ID to display the specific battery percentage rather than just a visual representation of battery level. The new battery indicator is available on iPhone 12 and iPhone 13 models, with the exception of the 5.4-inch iPhone 12/13 mini. It is also available on the iPhone 11 Pro and Pro Max, XS and XS Max, and...
iOS 16 battery percentage

Apple Limiting iOS 16 Beta 5 Battery Percentage Display to Select iPhones: Here Are the Supported Devices

Tuesday August 9, 2022 2:51 am PDT by
Apple this week brought back one of the most highly requested features from iOS users since the launch of the iPhone X in 2017: the ability to see your battery percentage directly in the status bar. Ever since the launch of the iPhone X with the notch, Apple has not allowed users to show their battery percentage directly in the status bar, forcing them to swipe down into Control Center to...
ios 16 battery indicator 2

Everything New in iOS 16 Beta 5: Battery Percentage in Status Bar, Find My Changes and More

Monday August 8, 2022 12:53 pm PDT by
Apple today seeded the fifth beta of iOS 16 to developers for testing purposes, introducing some small but notable changes to the iOS operating system. Subscribe to the MacRumors YouTube channel for more videos. We've rounded up everything new in the fifth beta below. Battery Percentage in Status Bar The battery icon in the status bar now displays the exact battery percent, a feature that ...
iphone 14 pro max camera bump compared lipilipsi 16 9

Bigger iPhone 14 Pro Max Camera Bump Shown Alongside iPhone 13 Pro Max

Monday August 8, 2022 4:33 am PDT by
The camera bump on the upcoming iPhone 14 Pro Max is expected to be the largest rear lens housing Apple has ever installed on its flagship smartphones, and a new photo offers a rare glimpse at just how prominent it is compared to Apple's predecessor device. iPhone 14 Pro Max dummy (left) vs iPhone 13 Pro Max All iPhone 14 models are expected to see upgrades to the Ultra Wide camera on the...
airpods pro black background

Beyond iPhone 14: Five Apple Products Expected to Launch Later This Year

Monday August 8, 2022 9:43 am PDT by
While the iPhone 14 and Apple Watch Series 8 are expected to be announced in September as usual, there are several more Apple products rumored to launch later this year, including new iPad and Mac models and more. Beyond the iPhone and Apple Watch, we've put together a list of five Apple products that are most likely to be unveiled by the end of 2022. Second-Generation AirPods Pro Apple...