Apple Faces Antitrust Lawsuit Over Apple Pay Operations
The federal judge denied dismissing a class action lawsuit claiming exclusion of digital wallets other than Apple Pay.
- A federal judge partially denied Apple’s request to dismiss a class action antitrust lawsuit over the operations of Apple Pay.
- Epic Games has filed a petition with the U.S. Supreme Court to reexamine if Apple’s software business operations violate federal antitrust laws.
A California federal judge denied Apple’s request to dismiss a class action suit brought against the company by three credit unions. The suit alleges that Apple has violated antitrust regulations by excluding other payment wallets apart from Apple Pay and also charging high processing fees.
The judge has agreed to hear the case covering Apple’s iOS tap-to-pay market. Conventionally, other digital wallets lack the functionality and convenience of Apple Pay. Furthermore, shifting to an Android platform appears to be cost-prohibitive for users. Consequently, Apple has created a monopoly in the sector.
The plaintiffs, who include Iowa’s Affinity Credit Union, Illinois’ Consumers Co-op Credit Union, and GreenState Credit Union, have also argued that Apple Pay’s ties to Apple devices are unlawful. Apple has refused the allegation, stating that the use of Apple Pay is free and that users are free to use alternatives.
However, the judge affirmed that Apple was charging inflated, arbitrary fees and noted that a lack of competition harmed customers. He also noted the lack of NFC access for third-party wallet apps, calling it anti-competitive. The lawsuit has come on the heels of a 2022 ruling in the European Union that declared Apple Pay anti-competitive by making the iPhone’s NFC reader exclusive to Apple’s payment app.
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Epic Games Continues Fight Against Apple in Supreme Court
In another antitrust case, Epic Games filed a petition (Writ of Certiorari) against Apple in the U.S. Supreme Court. It asks to review a lower court’s ruling and requests a ruling on wider antitrust implications as stated under the Sherman Act.
Epic Games, the publisher of Fortnite, sued Apple in 2020 after the game was removed from iOS, after the game broke App Store rules, allowing players to get in-game currency without using Apple’s interface as an intermediary.
Following the removal of Fortnite from the Apple Store, Epic Games initiated a campaign against Apple’s software business practices, its processing fees, and the closed app distribution network.
In early 2023, Apple largely won the lawsuit against Epic in the Ninth U.S. Circuit Court of Appeals, with the exception of the ruling that Apple had violated California’s Unfair Competition Law for restricting customers from alternative payment methods. Consequently, Apple’s rules are expected to continue unchanged if the Supreme Court decides not to get involved.
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