Sept 27 (Reuters) - Apple (AAPL.O) was ordered on Wednesday to face a
private antitrust lawsuit by payment card issuers accusing the company
of thwarting competition for its Apple Pay mobile wallet.
U.S. District Judge Jeffrey White said the plaintiffs could try to
prove that Apple violated the federal Sherman antitrust law by
enforcing a 100% monopoly over the domestic market for tap-and-pay
wallets for iPhones, iPads and Apple Watches.
The Oakland, California-based judge also dismissed a "tying" claim,
which accused Apple of requiring purchasers of iOS devices to buy Apple
Pay or forego purchases of competing wallets.
Apple, based in Cupertino, California, did not immediately respond to
requests for comment.
"We are happy with this ruling," Steve Berman, a lawyer for the
plaintiffs, said in an email. "There are billions at stake so getting
by the motion (to dismiss) largely intact was huge for the class."
The proposed class action is led by Illinois' Consumers Co-op Credit
Union, and Iowa's Affinity Credit Union and GreenState Credit Union.
They said Apple "coerces" people who use its smartphones, tablets and
smart watches into using its own wallet for tap-and-pay transactions,
unlike makers of Android-based devices that let people choose wallets
such as Google Pay and Samsung Pay.
According to the complaint, Apple's conduct forces more than 4,000
banks and credit unions that use Apple Pay to pay at least $1 billion
of excess fees, and harms consumers by minimizing the incentive to make
Apple Pay safer and easier to use.
White said the plaintiffs plausibly alleged that Apple allow
alternatives to Apple Pay, and that more competition would spur
innovation and reduce prices.
In seeking a dismissal, Apple said it charged "nominal" fees to even
smaller card issuers, and that the plaintiffs ignored the "competitive
reality" that consumers could still pay with cash, credit and debit
cards, and other means.
European Union antitrust regulators accused Apple in May 2022 of
abusing its dominance in iOS devices and mobile wallets. The regulators
have since continued their investigation.
The case is Affinity Credit Union et al v Apple Inc, U.S. District
Court, Northern District of California, No. 22-04174.
https://www.reuters.com/legal/apple-is-ordered-face-apple-pay-antitrust-lawsuit-2023-09-27/
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