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
9 months ago
Are you able to use Apple Pay on competitor phones?
Score: 50 Votes (Like | Disagree)
Apple_Robert Avatar
9 months 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: 38 Votes (Like | Disagree)
GermanSuplex Avatar
9 months 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: 31 Votes (Like | Disagree)
icanhazmac Avatar
9 months 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
9 months 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: 25 Votes (Like | Disagree)
cupcakes2000 Avatar
9 months 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)

Popular Stories

iPhone 15 Pro Buttons CAD Leak

iPhone 15 Pro Low-Energy Chip to Allow Solid-State Buttons to Work When Device is Off or Out of Battery

Wednesday March 29, 2023 1:54 am PDT by
The iPhone 15 Pro and Pro Max will use a new ultra-low energy microprocessor allowing certain features like the new capacitive solid-state buttons to remain functional even when the handset is powered off or the battery has run out, according to a source that shared details on the MacRumors forums. CAD-based render of new solid-state buttons on iPhone 15 Pro models The source of this rumor is ...
maxresdefault

Apple Announces WWDC 2023 Event Taking Place June 5 to 9

Wednesday March 29, 2023 9:58 am PDT by
Apple today announced that its 34th annual Worldwide Developers Conference will take place from Monday, June 5 to Friday, June 9. Like WWDC 2020, 2021, and 2022, WWDC 2023 will be an online event for the most part, and it will be open to all developers at no cost. Subscribe to the MacRumors YouTube channel for more videos. Apple will provide online sessions and labs, which will allow...
iPhone 15 Pro Multi Purpose button Mute Switch Feature Green 2

iPhone 15 Pro Rumored to Feature Multi-Use Action Button Instead of Mute Switch

Wednesday March 29, 2023 7:28 am PDT by
iPhone 15 Pro and iPhone 15 Pro Max models are rumored to feature a customizable Action button like the Apple Watch Ultra, according to a MacRumors forum member who leaked accurate details about the Dynamic Island on iPhone 14 Pro models last year. The source claimed the Action button will replace the Ring/Silent switch that has been included on every iPhone model since 2007. They did not...
iOS 16

Apple Releases iOS 16.4 With New Emoji, Safari Web Push Notifications, Beta Changes, Voice Isolation for Calls and More

Monday March 27, 2023 10:03 am PDT by
Apple today released iOS 16.4, the fourth major update to the iOS 16 operating system that initially came out last September. iOS 16.4 comes two months after the launch of iOS 16.3, an update that added Security Keys for Apple ID. iOS 16‌.4 and iPadOS 16.4 can be downloaded on eligible iPhones and iPads over-the-air by going to Settings > General > Software Update. It can take a few minutes...
Apple Music Classical

Apple Explains Why It Launched an iPhone App Dedicated to Classical Music

Monday March 27, 2023 8:54 pm PDT by
Apple today published a support document explaining why it decided to release a standalone Apple Music Classical app for classical music. In short, Apple says the app was designed to support classical music's complex metadata:Classical music is different. It has longer and more detailed titles, multiple artists for each work, and hundreds of recordings of well-known pieces. The Apple Music...
iOS 16

Apple Seeds First Betas of iOS 16.5 and iPadOS 16.5

Tuesday March 28, 2023 10:15 am PDT by
Apple today seeded the first betas of upcoming iOS 16.5 and iPadOS 16.5 updates to developers for testing purposes, with the software coming a day after the launch of iOS 16.4 and iPadOS 16.4. Registered developers can opt in to the betas by opening up the Settings app, going to Software Update, tapping on the "Beta Updates" option and toggling on the iOS 16 Developer Beta. Note that an...
home upgrade available feature

PSA: Apple Has Made Its New Home Architecture Update Available Again

Tuesday March 28, 2023 1:50 am PDT by
Apple has made the option to upgrade to new Home architecture available again with the release of iOS 16.4, iPadOS 16.4, and macOS Ventura 13.3, after it temporarily pulled the update in December. After updating Apple devices to the latest software, users can once again opt to upgrade any homes set up in the Home app to the new Home architecture, which Apple says brings faster, more reliable ...