(Reuters) – Apple Inc. was sued on Monday in a proposed class action lawsuit by payment card issuers accusing the iPhone maker of abusing its market power in mobile devices to counter the competition for its Apple Pay mobile wallet.
According to a lawsuit filed in San Francisco federal court, Apple “forces” consumers who use their smartphones, smartwatches and tablets to use their own wallet for contactless payments, unlike Android-based device makers who let consumers choose wallets like Google Pay and Samsung Pay.
The plaintiff, Iowa’s Affinity Credit Union, said that Apple’s anti-competitive behavior forced the more than 4,000 banks and credit unions that use Apple Pay to pay at least $ 1billion in additional fees annually for the privilege.
It also said that Apple’s behavior minimizes the incentive for the Cupertino, California-based company to make Apple Pay work better and make it more resilient to security breaches.
“Apple’s behavior harms not only issuers but also consumers and competition as a whole,” the complaint said.
The lawsuit is aimed at unspecified triple damages and an end to Apple’s alleged anti-competitive behavior.
Apple did not immediately respond to requests for comment.
The company is already facing a potentially high fine after EU regulators said on May 2 that they had abused their dominance in iOS devices and mobile wallets by refusing to give payment rivals access to their technology.
According to the complaint, Apple issuers charge a fee of 0.15% on credit transactions and a fixed fee of 0.5 cents on debit transactions with Apple Pay, while Android-based competitors do not charge anything.
The plaintiff is represented by the law firms Hagens Berman Sobol Shapiro and Sperling & Slater.
The case is Affinity Credit Union v. Apple Inc.US District Court, Northern District of California.