Apple Inc. (NASDAQ: AAPL) has been directed by a US District Judge Jeffrey White to face a private antitrust lawsuit filed by payment card issuers.
The lawsuit alleges that Apple impeded competition for its Apple Pay mobile wallet by establishing a 100% monopoly in the domestic market for tap-and-pay wallets compatible with iPhones, iPads, and Apple Watches.
The plaintiffs, led by Illinois’ Consumers Co-op Credit Union, Iowa’s Affinity Credit Union, and GreenState Credit Union, contend that Apple’s practices force users of its devices to use its own wallet, unlike Android-based devices that offer a choice between various wallets such as Google Pay and Samsung Pay.
The lawsuit alleges that Apple’s actions resulted in over 4,000 banks and credit unions paying at least $1 billion in excess fees, adversely affecting consumers by reducing the incentive to enhance the safety and usability of Apple Pay.
“We are happy with this ruling,” Steve Berman, a lawyer for the plaintiffs, said in an email to Reuters. “There are billions at stake so getting by the motion (to dismiss) largely intact was huge for the class.”
Apple sought to dismiss the case, saying that it charged “nominal” fees to even smaller card issuers. The company also emphasized that consumers could still pay with cash, credit and debit cards, and other means.
The judge dismissed a “tying” claim, which accused Apple of coercing buyers of iOS devices into choosing Apple Pay or forgoing competing wallets.
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