Apple has been ordered to defend a private antitrust lawsuit, where payment card issuers accused the company of preventing competition for Apple Pay.
U.S. District Judge Jeffrey White said there is a possibility the claims that Apple violated the antitrust law by enforcing 100% monopoly over a domestic market, could be proven.
He also dismissed the iPhone maker required purchasers of iOS devices to also purchase Apple Pay, or forego purchasing competing wallets.
A lawyer for the accusers said, “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 class action is being led by a Consumers Co-op Credit Union, an Affinity Credit Union, and a GreenState Credit Union.
They claim Apple “coerces” people using iPhones, iPads, and Apple smartwatches into using the Apple Pay wallet for tap-and-pay. However, Android allows individuals to choose between Google Pay and Samsung Pay.
The complaint revealed Apple’s conduct forces over 4,000 banks and credit unions to use Apple Pay, in order to pay at least $1 billion of excess fees, harming consumers by minimising the incentive to make Apple Pay safer.
The Judge said the accusers plausibly alleged the company allow alternative options, and more competition would cause innovation, reducing prices.
Apple sought a dismissal, saying it charged “nominal” fees to smaller card issuers, and the accusers ignored the “competitive reality” where consumers still pay with cash, credit and debit cards, or other means.
EU antitrust regulators had previously accused Apple in May last year, of abusing dominance in iOS devices and mobile wallets. They are still continuing their investigation.
