August 14, 2022

“Coercion to use an electronic wallet.” Apple sued over Apple Pay

US tech giant Apple is facing a class action lawsuit that accuses the company of forcing consumers to use the Apple Pay contactless payment system. The lawsuit was filed in federal court in California by the Iowa-based Affinity Credit Union.

According to the credit union, Apple is forcing users of its smartphones, smartwatches and tablets to use the system it created for contactless payments, while owners of Android devices have the choice to use, for example, Google Pay or Samsung Pay.

Thus, according to the plaintiffs, the company does not allow consumers to use competitors’ payment applications. The lawsuit alleges that this forced more than four thousand banks and credit organizations using Apple Pay to pay at least a billion dollars annually for these services. Apple charges banks a fee for every transaction made with a card that is registered in an e-wallet.

Apple did not promptly respond to a BBC request for comment.

After the invasion of the Russian army in Ukraine, Apple joined the sanctions imposed against Moscow. Therefore, Apple Pay has not been working in Russia since April 2022 – just like its main competitor Google Pay, an Android-based electronic payment system.

Affinity Credit Union believes that due to the lack of competition, Apple has no incentive to improve its payment system and make it more resistant to hacking attempts.

“Apple’s behavior is detrimental not only to credit institutions, but to consumers and the competitive situation in the market as a whole,” Affinity Credit Union said. “If Apple were to face competitors, it would not be able to charge such huge commissions.”

The plaintiffs demand that Apple pay damages (their size is not specified) and stop anti-competitive behavior.

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