Apple was hit with a lawsuit over allegations it uses its market dominance in devices to establish a leadership position in mobile payments, the latest antitrust battle facing the iPhone maker.
A proposed class action complaint against Apple was launched by financial group Affinity Credit Union, which claimed the company had established a monopoly over contactless payments on iOS devices, forcing card issuers which are compatible with Apple Pay to pay fees.
The credit union is leading the way with the case, but hopes card issuers join up to make it a class action claim.
Affinity Credit Union argues iPhone users are made to use Apple Pay if they want to use tap and go, as the company restricts other financial institutions, such as Citi and American Express, from launching a similar feature on their own apps and interfaces.
Apple is then able to charge card issuers fees which no other mobile venture imposes.
Affinity Credit Union claims in its lawsuit Apple charges issuers 0.15 per cent on every credit card transaction and 0.05 per cent on debit cards, while rivals Google Pay and Samsung Pay do not charge any fees.
In total, Affinity Credit Union claimed the fees generated $1 billion for Apple in 2019, which it predicts will quadruple by 2023.
The credit union alleges Apple violates antitrust law by allowing only Apple Pay to carry out NFC payments on its devices.
Apple told the European Commission, which is in the process of a probe into Apple payments, it cannot provide outside access to NFC because of security concerns.
Scrutiny into its payments practices comes at a time when Apple is feeling the heat from regulators across the world, with authorities taking aim at App Store policies, tracking features and general market dominance in technology.Subscribe to our daily newsletter Back