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A class-action lawsuit alleging that Apple Pay violates antitrust laws by forcing consumers to use the Wallet app has been given the go-ahead by a judge in California on Wednesday.
Apple Pay is an important part of the Apple ecosystem and is offered when you set up your device. The popularity of Apple Wallet and its functions have already attracted the attention of antitrust authorities.
According to a report by Reuters, Consumer Cooperative Credit Union of Illinois, Affinity Credit Union and GreenState Credit Union of Iowa are accusing Apple of antitrust practices regarding Apple Pay and have filed a class-action lawsuit. The lawsuit made it through U.S. District Judge Jeffrey White with minor changes, meaning Apple will have to go to trial.
A judge has dismissed a related lawsuit that accused Apple of requiring iPhone owners to use Apple Pay and forgo other wallets. The lawsuit focuses on the superiority of Apple Pay on iPhone compared to customer choice on Android.
“We are pleased with this decision,” Steve Berman, an attorney for the plaintiffs, said in an email. “Billions are at stake, so to get the (termination) proposal essentially untouched was a huge achievement for the class.”
The class action lawsuit is based on the Sherman Antitrust Act. This means the court must find that Apple maintains a 100% monopoly in the domestic market for tap-to-pay wallets on iPhone, iPad and Apple Watch.
The complaint alleges that Apple's actions force more than 4,000 banks and credit unions that use Apple Pay to pay at least $1 billion in additional fees. This harms consumers by minimizing incentives to make Apple Pay more secure and easier to use — what would happen if Apple allowed wallet competition.
The report states that Apple sought to have the lawsuit dismissed, but was unsuccessful. The company said it charged “nominal” fees to small card issuers and that the plaintiffs ignored the “competitive reality” that consumers can pay with cash, card or other methods.