NEWS  News  December 17, 2023  Reading time: 2 Minute(s)

Max (RS editor)

Apple and financial powerhouses Visa and Mastercard find themselves entangled in an antitrust class action lawsuit, accused of orchestrating a conspiracy that stifles competition in the realm of point-of-sale payment card services. Filed on Thursday, the lawsuit alleges that the trio engaged in unlawful agreements, ultimately resulting in merchants paying inflated fees for credit and debit transactions.

The crux of the complaint revolves around Apple's alleged collusion with Visa and Mastercard, where the tech company purportedly agreed not to compete with the credit card giants. In return, Visa and Mastercard agreed to pay Apple a portion of transaction fees for payments made through Apple Pay on their networks. This financial arrangement, the lawsuit contends, amounts to a substantial and ongoing cash bribe, eliminating any incentive for Apple to invest in developing its own payment network. Such an independent network could potentially foster increased competition and drive down processing fees for merchants.

The lawsuit sheds light on Apple's exclusive control over the iPhone's NFC chip for contactless payment transactions, effectively making Apple Pay the sole mobile wallet platform available on the iPhone. The complaint contends that Apple's prohibition prevents other companies from accessing the iPhone's "Secure Element", a key hardware component that could enable the creation of alternative mobile-based payment solutions. This, the lawsuit alleges, further reinforces the anti-competitive practices aimed at safeguarding the market dominance of Visa and Mastercard.

This legal development comes on the heels of reports that Apple has offered to open up its Apple Pay NFC system on iPhones to other companies, in response to ongoing antitrust investigations in the European Union. The outcome of these investigations and the potential changes, if any, in the United States remain uncertain.

As the lawsuit unfolds, it raises critical questions about the dynamics of competition in the digital payment landscape and the influence of major players. The implications of this legal battle extend beyond the courtroom, potentially reshaping the future of point-of-sale payment card services and mobile payment solutions on a global scale.

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