Apple Pay antitrust lawsuit accuses Apple of coercing consumers, excessive fees

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A class action lawsuit alleging Apple Pay is violating antitrust law by coercing consumers to use the Wallet app got the go-ahead from a California judge Wednesday.

Apple Pay
Apple Pay



Apple Pay is an important part of Apple's ecosystem and is offered during device setup. The prominence of the Apple Wallet and its features have gained antitrust attention before.

According to a report from Reuters, Illinois' Consumers Co-op Credit Union and Iowa's Affinity Credit Union and GreenState Credit Union are accusing Apple of antitrust practices with Apple Pay and have proposed a class action lawsuit. The lawsuit made it through U.S. District Judge Jeffrey White with little change, meaning Apple will have to face the charges in court.

The judge threw out a tying claim that accused Apple of requiring iPhone owners to use Apple Pay and forego other wallets. The lawsuit is focused on the prominence of Apple Pay on iPhone versus the customer choice found on Android.

"We are happy with this ruling," Steve Berman, a lawyer for the plaintiffs, said in an email. "There are billions at stake so getting by the motion (to dismiss) largely intact was huge for the class."

The class action lawsuit uses the Sherman antitrust law as the basis for the proposal. It means the court must determine that Apple is enforcing a 100% monopoly over the domestic market for tap-and-pay wallets on iPhone, iPad, and Apple Watch.

The complaint alleges Apple's conduct forces more than 4,000 banks and credit unions that use Apple Pay to pay at least $1 billion in excess fees. This harms the consumers by minimizing the incentive to make Apple Pay safer and easier to use -- which would occur if Apple allowed wallet competition.

The report states that Apple sought a dismissal of the lawsuit and failed. The company said it charged "nominal" fees to smaller card issuers and that the plaintiffs ignored the "competitive reality" that consumers could pay with cash, card, or other means.

Read on AppleInsider

Comments

  • Reply 1 of 12
    This is another of those delusional lawsuits. No one forces me or any other iPhone/Apple Watch owner to use Apple Pay! This, in part at least, has occurred because of the excess number of ambulance chasers (lawyers) in the US who lay in wait to seduce naive and foolish consumers into a lawsuit whose fees will only be paid if they "win". There are more lawyers per capita in the US than in any other country in the world and Apple, because of its success, has the biggest target painted on its back that any company has ever had!. Any payment system that collects and remits payments deserves to earn a small fee. The idea that because Apple has made such large profits that anything it does MUST be anticompetitive and a violation of Sherman antitrust laws - a law that is so out of date for the times that it ought to be repealed or at least modernized - is delusional. I am not sure the same doesn't apply to the judge who was foolish enough to allow the suit to proceed. It is absolutely disgusting!
    Anilu_777pscooter63fotoformatiOS_Guy80rob53williamlondonwatto_cobra
  • Reply 2 of 12
    chadbagchadbag Posts: 2,008member
    I think consumers should sue law schools for putting out a lousy product and driving costs up for everyone be sure companies like Apple have to defend these stupid suits all habe time. 
    rob53kurai_kagewatto_cobra
  • Reply 3 of 12
    camber said:
    This is another of those delusional lawsuits. No one forces me or any other iPhone/Apple Watch owner to use Apple Pay! This, in part at least, has occurred because of the excess number of ambulance chasers (lawyers) in the US who lay in wait to seduce naive and foolish consumers into a lawsuit whose fees will only be paid if they "win". There are more lawyers per capita in the US than in any other country in the world and Apple, because of its success, has the biggest target painted on its back that any company has ever had!. Any payment system that collects and remits payments deserves to earn a small fee. The idea that because Apple has made such large profits that anything it does MUST be anticompetitive and a violation of Sherman antitrust laws - a law that is so out of date for the times that it ought to be repealed or at least modernized - is delusional. I am not sure the same doesn't apply to the judge who was foolish enough to allow the suit to proceed. It is absolutely disgusting!
    Did we read the same article?  I ask because the arguments you're making aren't based on the information presented in the article.  

    You "No one forces me or any other iPhone/Apple Watch owner to use Apple Pay!"
    Article: "The judge threw out a tying claim that accused Apple of requiring iPhone owners to use Apple Pay and forego other wallets." - So the claim you're arguing against isn't even part of the lawsuit. 

    The entirety of the rest of your argument falls flat because it's primarily misleading and deflective.  The complaint alleges Apple's conduct forces more than 4,000 banks and credit unions that use Apple Pay to pay at least $1 billion in excess fees.  This is a B2B issue, not a consumer facing issue.  Nothing in your argument even comes close to addressing the actual issues raised in the suit.  Seems as if you found a convenient soapbox for your opinions, regardless of whether or not they relate to the topic. 





    avon b7grandact73FileMakerFeller
  • Reply 4 of 12
    You spend billions in R&D to build an enticing product line and ecosystem.

    Them a bunch of looneys force you to open all your effort for everyone to enjoy.

    Crazy this is even being discussed.
    iOS_Guy80rob53igorskyFileMakerFellerwatto_cobra
  • Reply 5 of 12
    avon b7avon b7 Posts: 7,831member
    camber said:
    This is another of those delusional lawsuits. No one forces me or any other iPhone/Apple Watch owner to use Apple Pay! This, in part at least, has occurred because of the excess number of ambulance chasers (lawyers) in the US who lay in wait to seduce naive and foolish consumers into a lawsuit whose fees will only be paid if they "win". There are more lawyers per capita in the US than in any other country in the world and Apple, because of its success, has the biggest target painted on its back that any company has ever had!. Any payment system that collects and remits payments deserves to earn a small fee. The idea that because Apple has made such large profits that anything it does MUST be anticompetitive and a violation of Sherman antitrust laws - a law that is so out of date for the times that it ought to be repealed or at least modernized - is delusional. I am not sure the same doesn't apply to the judge who was foolish enough to allow the suit to proceed. It is absolutely disgusting!
    Did we read the same article?  I ask because the arguments you're making aren't based on the information presented in the article.  

    You:  "No one forces me or any other iPhone/Apple Watch owner to use Apple Pay!"
    Article: "The judge threw out a tying claim that accused Apple of requiring iPhone owners to use Apple Pay and forego other wallets." - So the claim you're arguing against isn't even part of the lawsuit. 

    The entirety of the rest of your argument falls flat because it's primarily misleading and deflective.  The complaint alleges Apple's conduct forces more than 4,000 banks and credit unions that use Apple Pay to pay at least $1 billion in excess fees.  This is a B2B issue, not a consumer facing issue.  Nothing in your argument even comes close to addressing the actual issues raised in the suit.  Seems as if you found a convenient soapbox for your opinions, regardless of whether or not they relate to the topic. 





    I see what you mean and thought the same, to a point on first read of the article and the comment, but on a second read there are plenty of 'consumer' facing references in the article and I imagine the suit too. 

    The part that references having a claim thrown out seems to imply that it was just a part and the rest is moving forward as planned. 

    I've long rejected Apple's claim that Apple doesn't harm competition with Apple Pay and have only seen that stance harden.

    Just recently I had to setup a new iPhone and the setup process definitely pushes the user to include cards in Apple Wallet/ Pay. 
    edited September 2023
  • Reply 6 of 12
    I have at least one credit card that doesn't support Apple Pay, and another one that didn't support it for quite some time after the release of Apple Pay.  I guess having a choice about whether or not one supports Apple Pay constitutes being forced to pay Apple's fees now?

    Does that mean I can sue Walmart for forcing me to pay the prices on the shelf?  Does that mean my wife's restaurant can sue Sysco for being forced to pay their prices?

    Freeloaders who think they have the right to make other people work for them on the freeloader's terms.
    edited September 2023 iOS_Guy80watto_cobra
  • Reply 7 of 12
    rob53rob53 Posts: 3,263member
    avon b7 said:

    Just recently I had to setup a new iPhone and the setup process definitely pushes the user to include cards in Apple Wallet/ Pay. 
    Here you go again. There's an obvious "skip" button when setting up any iOS device. You're not forced to enter or accept much of anything. It's actually very easy to set up any Apple device without an Apple ID or any of the normal configurations. You have to proactively enter everything. Apple does, however, make it very easy, a lot easier than any other computer ecosystem, to set up every Apple device, especially the iPhone. They also make it very easy to move data from an old phone to a new phone. This is why I've only purchased Apple devices since the early 90's. I want Apple's ecosystem, I don't want someone else's garbage forced on my Apple devices, especially not by countries who have nothing good to offer. As for Apple fees, they aren't any different than any other credit card company. Actually they're better because I (maybe not you) can buy Apple products on time using the Apple card without any monthly interest as long as I pay my balance off. I haven't paid Apple any fees for a very long time so this lawsuit is a non issue. 
    Cesar Battistini Mazierokurai_kagewilliamlondontmaywatto_cobrajony0
  • Reply 8 of 12
    You spend billions in R&D to build an enticing product line and ecosystem.

    Them a bunch of looneys force you to open all your effort for everyone to enjoy.

    Crazy this is even being discussed.
    AT&T and IBM felt the same way.
    williamlondonFileMakerFellermuthuk_vanalingam
  • Reply 9 of 12
    rob53 said:
    avon b7 said:

    Just recently I had to setup a new iPhone and the setup process definitely pushes the user to include cards in Apple Wallet/ Pay. 
    Here you go again. There's an obvious "skip" button when setting up any iOS device. You're not forced to enter or accept much of anything. It's actually very easy to set up any Apple device without an Apple ID or any of the normal configurations. You have to proactively enter everything. Apple does, however, make it very easy, a lot easier than any other computer ecosystem, to set up every Apple device, especially the iPhone. They also make it very easy to move data from an old phone to a new phone. This is why I've only purchased Apple devices since the early 90's. I want Apple's ecosystem, I don't want someone else's garbage forced on my Apple devices, especially not by countries who have nothing good to offer. As for Apple fees, they aren't any different than any other credit card company. Actually they're better because I (maybe not you) can buy Apple products on time using the Apple card without any monthly interest as long as I pay my balance off. I haven't paid Apple any fees for a very long time so this lawsuit is a non issue. 
    Well said!  There isn't even an, "are you sure" confirmation, you just click a different button and continue device setup.  Just because Apple Pay makes it easier to make purchases in person, on the web, in apps, does not mean it is coercing users.  Users that appreciate that convenience will reward banks that support Apple Pay by using their products.  As I expected, a quick search reveals, 

    Visa and MasterCard have been embroiled in antitrust litigation repeatedly since the early 1970s—and there is no sign of this litigation abating any time soon. In fact, antitrust litigation now afflicts these networks nearly continuously.Yet the Visa and MasterCard networks continue to be able to exercise market power in large part because prior cases have failed to focus on the leading cause of Visa’s and MasterCard’s market power, i.e., the ability of banks to act collectively to fix interchange fees they collect from retail merchants throughout the United States.

    Source, https://www.robinskaplan.com/-/media/pdfs/the-persistence-of-antitrust-controversy-and-litigation-in-credit-card-networks.pdf

    Given how these credit card networks have been treated since their inception, it is no surprise that Apple is getting a similar treatment because it is sitting between consumers and their banks, and charging a nominal fee.  It also means we aren't going to hear an end to Apple Pay lawsuits any time soon.

    FileMakerFellerwatto_cobrajony0
  • Reply 10 of 12
    I have at least one credit card that doesn't support Apple Pay, and another one that didn't support it for quite some time after the release of Apple Pay.  I guess having a choice about whether or not one supports Apple Pay constitutes being forced to pay Apple's fees now?

    Does that mean I can sue Walmart for forcing me to pay the prices on the shelf?  Does that mean my wife's restaurant can sue Sysco for being forced to pay their prices?

    Freeloaders who think they have the right to make other people work for them on the freeloader's terms.
    I don’t know much about Sysco but if they are involved in any anticompetitive practices that fall under antitrust law the answer is yes.
    williamlondon
  • Reply 11 of 12
    avon b7avon b7 Posts: 7,831member
    rob53 said:
    avon b7 said:

    Just recently I had to setup a new iPhone and the setup process definitely pushes the user to include cards in Apple Wallet/ Pay. 
    Here you go again. There's an obvious "skip" button when setting up any iOS device. You're not forced to enter or accept much of anything. It's actually very easy to set up any Apple device without an Apple ID or any of the normal configurations. You have to proactively enter everything. Apple does, however, make it very easy, a lot easier than any other computer ecosystem, to set up every Apple device, especially the iPhone. They also make it very easy to move data from an old phone to a new phone. This is why I've only purchased Apple devices since the early 90's. I want Apple's ecosystem, I don't want someone else's garbage forced on my Apple devices, especially not by countries who have nothing good to offer. As for Apple fees, they aren't any different than any other credit card company. Actually they're better because I (maybe not you) can buy Apple products on time using the Apple card without any monthly interest as long as I pay my balance off. I haven't paid Apple any fees for a very long time so this lawsuit is a non issue. 
    There was no 'Do you want to add a card to Apple Wallet?' question as far as I remember.

    It was something like 'Add Card' and the card number itself had been pulled from somewhere. She had not enabled Apple Pay on the previous phone.

    That is a push IMO. 

    It was also worded in a way (this is a Spanish system so I can't be literal in English) that made her doubt about what was going on and she had to check with me before continuing. That in itself is indicative that the wording was not as clear as it should be.

    I'm not surprised. Even after all these years, if you don't have automatic system updates enabled and you get a notification of a system update and hit the 'No' button, (no meaning you don't want to update) does the system still update all by itself if it finds a Wi-Fi network while you are sleeping? 

    'No' is supposed to mean 'no' but Apple would interpret it as 'not right now' instead and actually tell you on the same page as the 'no' button that it would update the system if it was connected to a Wi-Fi network in the early hours of the morning!

    The question here is, how many people that hit the 'no' button are even aware of that condition? I ask because although it is there, it is not obvious, right from the text size, colour and placement of the information. 

    The message was (is ?) designed to be missed easily. Someone went out of their way to make it happen like that. Someone made a deliberate effort to get the update installed even when the user thought they were saying 'no'. 

    Quite literally Apple designing notification communication to get the update installed anyway, even when the user answered 'no' to the update proposal. 

    I've lost count of the times I've had to get my wife and others to do a double take on that screen and point out the 'hidden' text. 

    edited September 2023 FileMakerFellermuthuk_vanalingam
  • Reply 12 of 12
    chasmchasm Posts: 3,382member
    This lawsuit is not in any way about Apple “forcing” anyone to use Apple Pay, which they emphatically do not. That is the “front.”

    What this is ACTUALLY about is the fact that Apple’s (TINY!!) fee for Apple Pay comes out of the BANK’S transaction fee, ie the MERCHANT pays it. These greedy banks want 100 percent of “their” fee, not 99.8 percent of “their” fee. That is what this lawsuit is ACTUALLY about.

    They could drop support for Apple Pay to achieve this, but of course that would cost them a LOT of users as they change banks to one that supports Apple Pay.

    So they’re trying to negotiate with Apple by lawsuit. This will not end well for them, since we all went through this when Apple Pay came out, and the banks were forced to cave.

    Customers of the three credit unions in question should be contacting management about this decision, and threatening to change financial institutions.
    chadbagwilliamlondonihatescreennamesFileMakerFellerwatto_cobra
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