Apple is once again under fire over how it operates Apple Pay, and whether that model is anticompetitive. Here are the details.
Campaigner says Apple Pay’s ‘hidden fees’ affected 98% of British consumers
As reported by The Guardian, a new £1.5 billion (roughly $2 billion) lawsuit brought by Fairer Finance founder James Daley claims that Apple’s control over Apple Pay limited competition, creating costs within the banking system that were then passed on to “the vast majority” of UK consumers, “regardless of whether they owned an iPhone”.
From the report:
It is the first UK legal challenge to the company’s conduct in relation to Apple Pay, and takes place months after regulators like the Competition and Markets Authority and the Payments Systems Regulator began scrutinising the tech industry’s digital wallet services.
The lawsuit alleges that Apple charges hidden fees through Apple Pay, contrasting it with Android, where it claims the same fees do not exist.
Here’s what Daley told The Guardian:
“By shutting out competition and charging hidden fees, Apple has pushed up costs for millions of consumers. Shockingly, this doesn’t just affect Apple Pay users or iPhone owners. Banks have passed these costs on to all customers, meaning everyone is paying the price.”
Top comment by Graham Jones
It depends whether there was disclosure of these fees or not. That’s the bottom line. If they were, then it will be dismissed, but if not, then they have broke the law. As for withdrawing from the UK it would cost them a huge amount in lost profits. Apple gain huge profits from the UK and EU, almost 30%. Given that the UK is one of the larger economies in Europe, and one of the highest purchasing markets for Apple products and services, it would be like throwing away almost 5% or more of profits, which they ain’t gonna do. They will pay the fine if they have to and move on, but there’s no guarantee they’re at fault here. People are trying them before a judge has looked at the evidence.
Apple, unsurprisingly, refutes Daley’s claims. In addition to calling the class action “misguided” and claiming it should be dismissed, the company issued the following statement to The Guardian:
“Apple Pay is a seamless and secure way for users to make contactless payments, and one of many payment options available to consumers. Apple does not charge fees to consumers or merchants for using Apple Pay, and banks see meaningful benefits from offering Apple Pay to their customers – most notably fraud reduction.”
Apple also highlighted recent platform changes, saying it has opened up near-field communication and secure element interfaces to third-party apps in markets including the UK, allowing them to support contactless payments.
Be it as it may, Daley’s lawsuit is now before the U.K.’s Competition Appeal Tribunal, where judges will assess whether it can go ahead.
Do you think Apple Pay harms consumers? Let us know in the comments.
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