Apple Pay Fees Class Action Lawsuit Receives Certification

Apple is no stranger to legal battles, with the latest being a class action lawsuit filed by US banks and credit unions over the fees associated with Apple Pay. Thousands of financial institutions in the US have been given the green light to pursue their claims against Apple as a class action lawsuit, alleging that Apple blocks competing tap-to-pay wallets on the iPhone while charging fees to card issuers for Apple Pay transactions.

Understanding the Apple Pay Class Action Lawsuit

According to a report by Mactrast, the crux of the lawsuit lies in the fees that card issuers pay Apple for each transaction made through Apple Pay. Currently, Apple charges 0.15% of the value of credit card purchases and half a cent for each debit transaction, which can accumulate to significant amounts over time.

The original lawsuit was filed by Affinity Credit Union, GreenState Credit Union, and Consumers Co-op Credit Union in 2022, claiming that Apple’s fees for Apple Pay would not have been sustainable in a competitive market. They pointed out that Android wallets do not charge transaction fees to card issuers, highlighting a lack of competition in the market.

The crux of the lawsuit revolves around Apple’s alleged monopoly on tap-to-pay transactions using the iPhone’s NFC technology. By blocking rival wallets from utilizing this technology, Apple is accused of inflating fees for card issuers. The lawsuit seeks repayment of these fees and changes to Apple’s practices.

Apple attempted to have the case dismissed, but a ruling in 2023 allowed the claim of monopolization to proceed, albeit dismissing an allegation of unlawfully tying iPhones to Apple Pay.

The recently certified class includes any US financial institution that issued an Apple Pay-enabled card and paid Apple fees for processing transactions. The plaintiffs claim that thousands of banks and credit unions qualify to join the class action suit.

Judge White’s ruling allows the court to address key questions for the entire suing class, including whether Apple abused its monopoly power and harmed competition or card issuers with its fees. The court will also consider the methodology used by the plaintiffs’ damages expert, Christopher Vellturo, to calculate potential overcharges.

It is worth noting that Apple has made changes to its business practices since the lawsuit was filed, allowing third-party apps to utilize the iPhone’s contactless payment hardware without going through Apple Pay. While developers still need approval from Apple, this move has opened up competition in the market.