Apple reaping massive illegal profits from Apple Pay fees on card issuers, lawsuit claims
Apple has been hit with a class action lawsuit alleging that its Apple Pay policies illicitly allowed it to extract more than $1 billion in fees from card issuers.
Apple Pay
The complaint, lodged in the U.S. District Court for the Northern District of California on Monday, accuses the Cupertino tech giant of illegally profiting from pay card issuers and denying rivals access to the systems needed for a competing mobile wallet on iOS.
Hagens Berman, the law firm that successfully obtained a $450 million settlement from Apple over ebook price fixing, is representing the class, which is comprised of U.S. credit unions and financial institutions that have cards enabled for use in Apple Pay
"Having secured a monopoly for Apple Pay in this fashion, Apple charges card issuers who use Apple Pay supracompetitive fees for a service that is available on Android devices for free," the law firm representing the class said in a press release.
The lawsuit details the alleged "supracompetitive fee structure," as well as "tactics to weave Apple Pay into its existing structure of market dominance in the mobile device industry."
According to the lawsuit, Google Pay and Samsung Pay don't charge card issuers on transactions. Apple's fees amount to nearly $1 billion a year -- a number expected to grow to $4 billion by 2023.
"On the surface, Apple Pay's fees pushed onto card issuers may seem small, but truly the devil is in the details of Apple's policies," Steve Berman, Hagens Berman co-founder and managing partner said. "These fees add up, big time."
Apple charges U.S. card issuers 15 basis points on credit card transactions and $0.05 on debit card transactions. The lawsuit also takes issue with the fact that Apple Pay is the only mobile wallet on iOS. It calls that part of Apple's "exclusionary practices."
As such, the complaint says that Apple is in violation of antitrust regulations, including the Sherman Act, which targets monopolies.
The lawsuit seeks to reimburse card issuers charged by Apple and place an injunction to end Apple's fees and alleged exclusionary policies, among other prayers for relief.
Read on AppleInsider
Apple Pay
The complaint, lodged in the U.S. District Court for the Northern District of California on Monday, accuses the Cupertino tech giant of illegally profiting from pay card issuers and denying rivals access to the systems needed for a competing mobile wallet on iOS.
Hagens Berman, the law firm that successfully obtained a $450 million settlement from Apple over ebook price fixing, is representing the class, which is comprised of U.S. credit unions and financial institutions that have cards enabled for use in Apple Pay
"Having secured a monopoly for Apple Pay in this fashion, Apple charges card issuers who use Apple Pay supracompetitive fees for a service that is available on Android devices for free," the law firm representing the class said in a press release.
The lawsuit details the alleged "supracompetitive fee structure," as well as "tactics to weave Apple Pay into its existing structure of market dominance in the mobile device industry."
According to the lawsuit, Google Pay and Samsung Pay don't charge card issuers on transactions. Apple's fees amount to nearly $1 billion a year -- a number expected to grow to $4 billion by 2023.
"On the surface, Apple Pay's fees pushed onto card issuers may seem small, but truly the devil is in the details of Apple's policies," Steve Berman, Hagens Berman co-founder and managing partner said. "These fees add up, big time."
Apple charges U.S. card issuers 15 basis points on credit card transactions and $0.05 on debit card transactions. The lawsuit also takes issue with the fact that Apple Pay is the only mobile wallet on iOS. It calls that part of Apple's "exclusionary practices."
As such, the complaint says that Apple is in violation of antitrust regulations, including the Sherman Act, which targets monopolies.
The lawsuit seeks to reimburse card issuers charged by Apple and place an injunction to end Apple's fees and alleged exclusionary policies, among other prayers for relief.
Read on AppleInsider
Comments
Among the last group of people I’ll ever have any sympathy are credit card companies.
What utter bullshit. Typical, money-grabbing slime lawyer
https://www.lexology.com/library/detail.aspx?g=84446bf5-7cd3-4d98-8c43-e1000c2a7823
Microsoft have a monopoly with Windows OS because MS Windows is on 80% of the World's desktop computers. Not because Microsoft have 100% of the Windows OS market.
Just because one can only buy a Whopper at a BK, that doesn't mean BK, under the Sherman Act, have a monopoly with the Whopper. The "relevant market" would include all fast food burgers and not just the Whopper. And BK is under no obligation to allow McDonalds to sell Big Macs in their BK diners, to compete with their Whoppers.
Once upon a time there was a little red hen who scratched about the barnyard until she uncovered some grains of wheat. She called her neighbors and said 'If we plant this wheat, we shall have bread to eat. Who will help me plant it?'
"Not I, " said the cow.
"Not I," said the duck.
"Not I," said the pig.
"Not I," said the goose.
"Then I will," said the little red hen. And she did. The wheat grew tall and ripened into golden grain. "Who will help me reap my wheat?" asked the little red hen.
"Not I," said the duck.
"Out of my classification," said the pig.
"I'd lose my seniority," said the cow.
"I'd lose my unemployment compensation," said the goose.
"Then I will," said the little red hen, and she did. At last the time came to bake the bread. "Who will help me bake bread?" asked the little red hen.
"That would be overtime for me," said the cow.
"I'd lose my welfare benefits," said the duck.
“I'm a dropout and never learned how," said the pig.
"If I'm to be the only helper, that's discrimination," said the goose.
"Then I will," said the little red hen.
She baked five loaves and held them up for the neighbors to see.
They all wanted some and, in fact, demanded a share. But the little red hen said, "No, I can eat the five loaves myself."
“Excess profits," cried the cow.
“Capitalist leech," screamed the duck.
"I demand equal rights," yelled the goose.
And the pig just grunted.
And they painted "unfair" picket signs and marched round and around the little red hen shouting obscenities.
When the government agent came, he said to the little red hen, "You must not be greedy."
“But I earned the bread," said the little red hen.
"Exactly," said the agent. "That's the wonderful free enterprise system. Anyone in the barnyard can earn as much as he wants. But under our modern government regulations productive workers must divide their products with the idle."
And they lived happily ever after, including the little red hen, who smiled and clucked, "I am grateful, I am grateful." But her neighbors wondered why she never again baked any more bread.
generally no less than 65% market share. See Image Tech. Servs. II, 125 F.3d at 1206 (“Courts
generally require a 65% market share to establish a prima facie case of market power.”); Hunt-
Wesson, 627 F.2d at 924–25 (“market shares on the order of 60 percent to 70 percent have
supported findings of monopoly power”).592 A more conservative threshold would require a
market share of 70% or higher for monopoly power. See Kolon Indus. Inc. v. E.I. DuPont de
Nemours & Co., 748 F.3d 160, 174 (4th Cir. 2014) (“Although there is no fixed percentage
market share that conclusively resolves whether monopoly power exists, the Supreme Court has
never found a party with less than 75% market share to have monopoly power. And we have
observed that when monopolization has been found the defendant controlled seventy to one
hundred percent of the relevant market.” (citations omitted)); Syufy Enters. v. Am. Multicinema,
Inc., 793 F.2d 990, 995 (9th Cir. 1986) (“[A]s far as we know, neither the Supreme Court nor
any other court has ever decided whether a market share as low as 60-69% is sufficient, standing
alone, to sustain such a finding.”).
"Apple does not have market power in the smartphone market. Rather Apple only has 15 percent of global market share in 2020."
"Thus, the Court finds the relevant geographic market to be global."