Apple is included in a class-action lawsuit along with Mastercard and Visa, accused of conspiring to smear competition and make merchants pay higher fees for credit and debit card transactions. Merchant Mirage Wine & Spirits filed a lawsuit Thursday in federal court in East St. Louis, Illinois, alleging that Apple struck a deal with Visa and Mastercard to form an offensive and defensive alliance to avoid competition with the two existing credit card companies.
According to the complaint reported by Reuters, Apple's agreements with Visa and Mastercard are for consumers to use Apple's on their networks"Mobile wallet services"(i.e. Apple Pay), Visa and Mastercard will pay Apple Pay a portion of the transaction fee. According to the complaint, this is a case"Huge and persistent cash bribes", worth hundreds of millions of dollars a year.
Since there is no competition between the three companies in the complaint, there is no reason for any of the companies involved to try to improve their services and win more customers, such as reducing the card transaction fees paid by merchants. As a result, the so-called transactions do nothing to help merchants who rely on the network, instead making them pay more.
It is believed that if there is no market distribution agreement, Apple or a third party will enter the market"Putting downward pressure on entrenched network company fees"。
The lawsuit is not only about the charging arrangement, but also about Apple's hardware. Allegedly, under the agreements reached with Visa and Mastercard, Apple will"Protect your own market sector from competition by blocking third parties from accessing certain hardware in your iPhone"。
In the complaint, Apple allegedly agreed not to allow third-party payment apps"Reside in the Apple Pay mobile wallet or use NFC hardware installed on devices such as iPhones"。
If the protocol didn't exist, Apple would have more incentive to effectively manage its own payment network, with Apple Wallet funding coming from bank transfers and merchant fees, which still are"Profitable for Apple", but also"Significantly less"Visa and MasterCard fees.
The complaint also adds that it would also prompt Apple to open up NFC capabilities to third-party apps.
The lawsuit is seeking class action status and is represented"At least in the thousands"of merchants filed a class action lawsuit. The lawsuit also seeks treble damages under U.S. antitrust law.
Apple has not officially commented on the lawsuit.
While it may take a while for the lawsuit to come to a conclusion, it is still possible that Apple will open NFC access. On December 12, it was reported that Apple was considering opening up NFC functionality on iPhones to other payment services to ward off the troubles of EU antitrust regulation.