Thousands of U.S. banks and credit unions can jointly pursue antitrust claims challenging fees Apple Inc. charges card issuers for transactions made through Apple Pay, after a federal judge granted class-action status to the case.
U.S. District Judge Jeffrey White certified the proposed class on Sept. 23, allowing financial institutions that issued Apple Pay-enabled cards and paid transaction fees to Apple to pursue their claims collectively, according to AppleInsider.
The decision represents a procedural advance for the plaintiffs but doesn’t determine whether Apple violated antitrust law or whether the company will ultimately owe damages.
The dispute centers on Apple’s control of contactless payments on the iPhone and the fees it collects from card issuers when customers use Apple Pay. The financial institutions contend that Apple was able to impose those charges while preventing competing mobile wallets from accessing the iPhone’s contactless-payment capabilities, AppleInsider reported.
According to the publication, issuers pay Apple 0.15% of the value of credit-card transactions conducted through Apple Pay, while debit-card transactions carry a fee of half a cent each. That means an issuer would pay Apple 15 cents when a customer makes a $100 credit-card purchase through the service.
Affinity Credit Union, GreenState Credit Union and Consumers Co-op Credit Union brought the lawsuit in 2022. The plaintiffs argue that meaningful competition from other digital wallets would have constrained Apple’s ability to charge issuers, pointing to rival services on Android that they say don’t impose comparable transaction fees on card issuers, according to AppleInsider.
The newly certified class encompasses U.S. entities that issued cards compatible with Apple Pay and paid Apple fees when those cards were used for transactions. The plaintiffs estimate that thousands of banks and credit unions fall within that definition, AppleInsider reported.
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White concluded that central issues in the litigation can be addressed on a class-wide basis rather than requiring each financial institution to litigate separately. Those issues include whether Apple possessed monopoly power, whether its conduct damaged competition and whether issuers suffered financial harm from the fees, according to the report.
The judge also declined Apple’s request to exclude testimony from Christopher Vellturo, an expert retained by the plaintiffs to estimate potential damages. His analysis compares Apple’s issuer charges with what he identifies as zero-dollar issuer fees from competing mobile wallets to estimate potential overpayments, AppleInsider reported.
Apple challenged that methodology, but White determined that the company’s objections went to the persuasiveness of the analysis rather than whether the expert should be permitted to testify, according to the publication. Apple can continue challenging his assumptions and conclusions as the litigation proceeds.
The case has already survived an earlier effort by Apple to end the litigation. A 2023 ruling permitted the plaintiffs’ monopolization claim to proceed while dismissing a separate allegation involving the tying of Apple Pay to iOS devices, AppleInsider said.
The competitive landscape surrounding iPhone payments has also changed since the lawsuit was filed. Beginning with iOS 18.1 in 2024, Apple opened access that allows eligible third-party applications to conduct contactless transactions on the iPhone without using Apple Pay, and users can designate qualifying apps as their default contactless-payment option, according to AppleInsider. Developers remain subject to Apple’s approval process and commercial terms, including applicable platform fees.
Those changes may affect what prospective remedies would be appropriate if the plaintiffs prevail, but they don’t resolve the institutions’ claims involving fees already paid.
The plaintiffs are seeking compensation for allegedly excessive charges as well as changes to Apple’s practices, AppleInsider reported. With class certification granted, thousands of qualifying U.S. card issuers can now pursue those claims through a single proceeding rather than bringing individual cases.
Source: AppleInsider
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