Apple sued in United States over Apple Pay payment system monopoly

Apple has been hit with a lawsuit in the US over Apple Pay.

The tech giant is being accused of using its market power in the mobile phone industry to fend off competition from other payment card issuers.

The class-action complaint was filed in a federal court in California by Affinity Credit Union, an Iowa-based chartered credit union.

According to the complaint, Apple “coerces” consumers who use its smartphones, smart watches and tablets into using its own wallet for contactless payments, unlike makers of Android-based devices that let consumers choose wallets, such as Google Pay and Samsung Pay.

The complaint alleges that Apple prevents consumers from using competing mobile wallets capable of offering competing tap and pay solutions.

Iowa’s Affinity Credit Union said Apple’s anti-competitive conduct forced the more than 4,000 banks and credit unions that use Apple Pay to pay at least $1 billion in excess fees annually for the privilege.

It also said Apple’s conduct minimised the incentive for the California-based company to make Apple Pay work better and make it more resistant to security breaches.

“Apple’s conduct harms not only issuers, but also consumers and competition as a whole,” Affinity Credit Union said.

“If Apple faced competition, it could not sustain these substantial fees.”

The lawsuit seeks unspecified damages, and a halt to Apple’s alleged anti-competitive conduct.