Apple, Visa, and Mastercard Face Class Action Alleging Conspiracy to Hike Fees
Tech giant Apple along with global payment giants Visa Inc. (V.N) and Mastercard Inc. (MA.N), are facing a new proposed class action lawsuit accusing them of colluding to limit competition in the point-of-sale payment card network services market.
According to Reuters, the complaint, filed in a federal court in East St. Louis on Thursday by beverage retailer Mirage Wine & Spirits, alleges that these unlawful agreements led to artificially inflated fees for credit and debit transactions paid by merchants.
According to the lawsuit, Apple entered into agreements with Visa and Mastercard to refrain from competing with the two credit card companies. In return, Visa and Mastercard allegedly paid Apple a significant portion of transaction fees for purchases made on their networks by consumers using Apple’s Mobile Wallet service.
The complaint contends that these payments from Visa and Mastercard to Apple amounted to a “very large and ongoing cash bribe” of hundreds of millions of dollars annually. Unlike Google’s Android-based devices, the lawsuit claims that Apple’s iPhones restrict third-party mobile wallets.
This is not the first legal challenge Apple has faced regarding its payment services. In September, a U.S. judge ruled that Apple must face claims from payment card issuers who accused the company of coercing iPhone consumers to use its Apple Pay mobile wallet. Additionally, popular peer-to-peer payment platforms Venmo and Cash App filed a lawsuit last month, accusing Apple of suppressing competition in that space.
European Union antitrust regulators also weighed in last year, accusing Apple of hindering rivals’ access to tap-and-go transaction technology. Reuters recently reported that Apple has offered to grant rivals access to its mobile payments systems, a move that could potentially address EU charges.
Visa and Mastercard, not strangers to antitrust claims, have faced numerous legal challenges from merchants over transaction fees in the past. The current lawsuit adds another layer to the ongoing legal battles in the rapidly evolving landscape of digital payments.