Apple, Visa, and Mastercard find themselves entangled in a new antitrust class action lawsuit, accused of colluding to suppress competition in the point-of-sale payment card services market. The lawsuit alleges that this collaboration has resulted in merchants paying artificially inflated fees for credit and debit transactions, as reported by Reuters.
The lawsuit, filed on Thursday, contends that Apple entered into illicit agreements with Visa and Mastercard, effectively restraining competition with the two credit card giants. In exchange for this agreement, Visa and Mastercard allegedly paid Apple a portion of transaction fees for payments conducted through Apple Pay on their established networks.
According to the lawsuit, this agreement translates into Visa and Mastercard providing Apple with a substantial and continuous cash bribe. The core issue highlighted is that such arrangements eliminate Apple’s motivation to invest in developing its payment network. This lack of incentive hampers potential competition, possibly leading to reduced credit and debit card processing fees for merchants.
The legal action also underscores Apple’s restriction of other companies from accessing the iPhone’s NFC chip for contactless payments, making Apple Pay the exclusive mobile wallet platform on iPhones. The lawsuit claims that Apple, Visa, and Mastercard conspired to ensure Apple Pay transactions operate solely over the entrenched networks’ POS Transaction Payment systems. Additionally, Apple purportedly agreed to block third parties from accessing specific iPhone hardware, hindering them from establishing competing mobile-based payment solutions.
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Earlier reports indicated that Apple has proposed opening up the 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 whether similar changes will be implemented in the United States, remains uncertain.