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Apple Wallet Becomes the Latest Target of Antitrust Hunting Season

A U.S. Judge Opens the Gate for Legal Scrutiny of Apple's Payment Empire

Apple, the tech giant known for its iPhones, iPads, and a plethora of other cutting-edge products, has found itself in the crosshairs of antitrust litigation. On September 27, 2023, U.S. District Judge Jeffrey White greenlighted a private antitrust lawsuit against Apple, focusing on its Apple Pay mobile wallet. The lawsuit accuses Apple of maintaining a monopoly over the domestic tap-and-pay market for iOS devices.

The Plaintiffs and Their Claims

The class-action lawsuit is spearheaded by Illinois’ Consumers Co-op Credit Union, along with Iowa’s Affinity Credit Union and GreenState Credit Union. According to the plaintiffs, Apple has stifled competition by “coercing” users of its devices into using its proprietary wallet for tap-and-pay transactions. This, they argue, contrasts sharply with Android-based devices that allow users to opt for other digital wallets like Google Pay and Samsung Pay.

Attorney Steve Berman, representing the plaintiffs, noted in an email, “We are happy with this ruling. There are billions at stake so getting by the motion [to dismiss] largely intact was huge for the class.”

The Alleged Cost of Monopoly

The complaint further alleges that Apple’s actions have levied a financial toll on more than 4,000 banks and credit unions, forcing them to pay an excess of $1 billion in fees. This has a trickle-down effect, harming consumers by diminishing the incentive for Apple to make its mobile wallet safer and more user-friendly.

Apple’s Counterarguments Fall Short

Apple sought to dismiss the case, contending that it charges only “nominal” fees and that consumers still have other payment options like cash, credit and debit cards. However, the judge found the plaintiffs’ allegations of Apple violating federal Sherman antitrust law plausible, and allowed the case to proceed.

A Global Context: EU’s Ongoing Investigation

This isn’t Apple’s first rendezvous with antitrust regulators. In May 2022, the European Union accused Apple of abusing its market dominance in the realm of iOS devices and mobile wallets. This ongoing investigation adds another layer of complexity to Apple’s current legal challenges.

The Road Ahead

The case, Affinity Credit Union et al v Apple Inc, is set for another court meeting on December 1st at 11 AM PT. As this legal saga unfolds, it promises to be a pivotal moment not just for Apple, but for the broader tech industry grappling with antitrust issues. Judge White’s decision to let the lawsuit proceed has set the stage for a high-stakes battle that could reshape the future of digital payments.

Final Thoughts

Apple Pay’s antitrust woes mark a significant juncture in the discourse around tech monopolies and consumer choice. With billions of dollars and the architecture of digital payments at stake, this lawsuit could very well be a watershed moment in the ongoing debate over tech monopolies. Whatever the outcome, it’s clear that the era of unbridled tech expansion is facing increasingly stringent checks and balances.

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