Banks and credit unions can join forces in Apple Pay antitrust lawsuit

An antitrust lawsuit accusing Apple of blocking competition with Apple Pay has cleared a major hurdle, allowing thousands of U.S. banks and credit unions to join together in pursuing claims over fees paid to Apple.

U.S. District Judge Jeffrey S. White this week certified the case as a class action. The class covers U.S. entities that issued payment cards enabled for Apple Pay and paid Apple fees for transactions made using those cards.

The lawsuit was originally filed in 2022 and alleges that Apple used its control over the iPhone’s NFC technology to prevent competing tap-to-pay wallets from operating on equal terms, allowing the company to charge card issuers fees for Apple Pay transactions.

According to the plaintiffs, Apple collects a 0.15% fee from card issuers on credit card transactions made through Apple Pay and half a cent on debit card transactions. The lawsuit alleges those fees generate as much as $1 billion annually for Apple.

The plaintiffs argue that Apple’s restrictions left card issuers with little choice but to support Apple Pay if they wanted their cards to be used for contactless payments on iPhone.

The complaint contrasts Apple’s approach with Android, where multiple mobile wallets can offer contactless payments and card issuers are not charged an equivalent fee by Google.

Judge White also rejected Apple’s attempt to exclude expert testimony that the plaintiffs intend to use to support their allegation that Apple held monopoly power in the mobile wallet market.

Class certification does not determine whether Apple violated antitrust law. It allows qualifying banks and credit unions to pursue their claims collectively as the lawsuit continues.

Apple’s NFC policies have changed substantially since the case was filed. Beginning with iOS 18.1, Apple expanded access to the iPhone’s NFC and Secure Element technology, allowing third-party developers to offer contactless transactions inside their own apps in a growing number of countries.

That access is now available in markets including the United States, United Kingdom, Canada, Australia, Brazil, Japan, New Zealand and the European Economic Area.

The lawsuit concerns Apple’s earlier policies and seeks repayment of fees that card issuers allege they should not have been required to pay. The plaintiffs are also seeking injunctive relief against the practices challenged in the case.

Apple has denied that its Apple Pay practices violate competition law. The case will now continue with the certified class of financial institutions able to pursue the claims together.