The internet giant is accused of stifling competition from rival payment card issuers by utilising its dominant position in the mobile phone market.
An Iowa-based chartered credit union, Affinity Credit Union, filed the class-action lawsuit in a federal court in California.
The BBC contacted Apple for comment, but they did not react right away.
Apple “coerces” users of its smartphones, smart watches, and tablets to use its own wallet for contactless payments, in contrast to manufacturers of Android-based devices that provide users
According to the complaint, Apple forbids users from utilising competing mobile wallets that can provide competing tap and pay options.
Additionally, it said that Apple’s actions reduced the company’s incentive to improve Apple Pay’s functionality and make it more secure.
Affinity Credit Union stated that “Apple’s conduct damages not only issuers but also customers and competition as a whole.”
“Apple could not maintain these high fees if there were competition.”
Unspecified monetary damages and an end to Apple’s claimed anti-competitive behaviour are sought in the case.
Other Court battles
Apple already faces the prospect of a large fine after European Union regulators stated on May 2 that the company had exploited its position of dominance in mobile wallets and iOS devices by denying competitors in the payment industry access to its technology.
In contrast to competitors using Android, Apple charges issuers a 0.15 percent fee on credit transactions and a flat price of 0.5 cents on debit purchases when using Apple Pay, the complaint claims.
The legal offices Hagens Berman Sobol Shapiro and Sperling and Slater are defending the plaintiff.
They were instrumental in securing a $100 million settlement for a group of smaller iOS developers who alleged Apple had overcharged them for commissions last August.
In discussing the European Union’s probe of Apple’s mobile payment policies in May, the bloc’s digital chief Margrethe Vestager said Apple claimed it couldn’t provide access to NFC for security reasons.
The majority of mobile phone payments done in stores in Europe use a wireless technology called “Near Field Communication,” or NFC.
This feature facilitates ‘tap and go’ by permitting communication between a customer’s mobile phone and the store’s payment terminal.
Vestager stated on the EU website that “our study to date did not discover any material that would suggest to such a higher security risk.”
The information in our file, on the other hand, shows that Apple’s actions cannot be justified by security issues.
The Alphabet-owned tech giant is accused of overcharging 19.5 million users for app store purchases, according to a case that was approved by a court. Google is now facing a trial in London over an estimated 920 million pound (USD 1.1 billion) damages claim.
According to the class action lawsuit, which the Competition Appeal Tribunal validated on Monday, Google has been abusing its dominant position by charging up to 30% commission on well-known apps on the Play Store since October 2015, including Roblox, Candy Crush Saga, and Tinder.
Tuesday’s statement from a claimant group spokeswoman indicated that a full ruling has not yet been made public.
Regulators, competitors, and consumer advocates are suing companies like Google and rival Apple for alleged anti-competitive behaviour in an effort to rein in Big Tech. In recent years, Google has received fines totaling more than 8 billion euros (USD 8.2 billion) from the European Union alone for antitrust violations.
Liz Coll, a former digital policy manager at the nonprofit Citizens Advice organisation, is the plaintiff in the most recent British lawsuit lodged against Google. It is not anticipated that the case will get to trial before 2024. The legal team at Hausfeld is advising her.
Coll claims in the case that Google is abusing its dominant position at the expense of British Android smartphone and tablet consumers and that the Play Store commission violates European and British competition rules.
According to a court document that was released last year, Google’s mobile app store brought in USD 11.2 billion in income in 2019.