Apple Raised UK Banking Costs, Lawsuit Alleges

A new UK class action lawsuit against Apple seeks billions in damages by alleging that the company unlawfully restricted competition in contactless payments on the iPhone through Apple Pay, The Guardian reports.

The proposed opt-out collective action filed this week in the UK alleges that Apple abused its position in the market by limiting access to the iPhone's near-field communication (NFC) technology and charging fees to banks for the use of ‌Apple Pay‌. The claim seeks up to £1.5 billion (approximately $2 billion) in damages on behalf of an estimated 50 million UK consumers.

The complainant argues that ‌Apple Pay‌ has effectively been the only contactless mobile payment option available to iPhone users in the UK since its launch in 2015. According to the filing, Apple declined to grant third-party developers access to the iPhone's NFC hardware and Secure Element, preventing rival wallets from operating on equal terms and leaving banks and card issuers with no alternative but to participate in ‌Apple Pay‌ if they wished to offer mobile contactless payments to iPhone users.

The case heavily focuses on fees Apple reportedly charges issuing banks for ‌Apple Pay‌ transactions, commonly cited in industry reporting as approximately 0.15% of the transaction value in the UK. These fees are allegedly not consistent with industry norms and were only possible because Apple restricted competition on its platform. The suit further contends that banks passed the costs of those fees on to consumers through higher charges across a wide range of financial products, including current accounts, credit cards, savings accounts, and mortgages.

Around 98% of UK consumers hold accounts with banks that support ‌Apple Pay‌ and were therefore exposed to higher costs regardless of whether they personally used the service. On that basis, the claim seeks damages on a population-wide basis. The average payout per affected consumer would be relatively modest, estimated at roughly £26 to £35 if the claim were successful.

In a statement, Apple said that the lawsuit was "misguided and should be dismissed," adding:

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 emphasized changes to its platform that have occurred since the period covered by the claim. The company said it has recently expanded access to key technologies, including NFC and the Secure Element, allowing third-party developers to offer contactless payments within their own apps in the UK.

The claim has been lodged with the Competition Appeal Tribunal, which must determine whether the case can proceed as a collective action.

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