Campaigner launches £1.5bn legal action in UK against Apple over wallet’s ‘hidden fees’ | Apple
Financial campaigner James Daley has launched a £1.5bn class action against Apple over its mobile phone wallet, claiming the US tech company stifled competition and charged hidden fees that ultimately harmed 50 million British consumers.
The case targets Apple Pay, which is said to be the only contactless payment service available to iPhone users in Britain over the last decade.
Daley, founder of advocacy group Fairer Finance, claims this leads to anticompetitive behavior and allows Apple to charge hidden fees, ultimately increasing costs for banks, which pass the fees on to consumers regardless of whether they own an iPhone.
It is the first legal challenge in the UK to the company’s behavior regarding Apple Pay and comes months after regulators such as the Competition and Markets Authority and the Payment Systems Regulator began scrutinizing the tech industry’s digital wallet services.
The case has now been presented to the Competition Appeal Tribunal, which will decide whether the class action can proceed.
Daley said: “People will have no idea they are paying more for everyday banking because of the way Apple operates Apple Pay.
“Apple has increased costs for millions of consumers by eliminating competition and charging hidden fees. Surprisingly, this doesn’t just affect Apple Pay users or iPhone owners. Banks have passed these costs on to all customers, which means everyone pays the price.”
In a statement, Apple said the lawsuit was “misguided and should be dismissed,” adding: “Apple Pay is a seamless and secure way for users to make contactless payments and is one of many payment options available to consumers. Apple does not charge consumers or merchants to use Apple Pay, and banks have seen meaningful benefits from offering Apple Pay to their customers, most importantly reducing fraud.”
The company said it recently added technology capabilities including near-field technology (NFC) and secure element (SE) app interfaces that give third-party developers a way to enable contactless transactions from their own apps, including in the United Kingdom. “We will continue to ensure UK customers can access their preferred payment options in a safe and secure environment.”
Daley’s lawsuit alleges that Apple refused to give other app developers and outside businesses access to the contactless payment technology on its iPhones, meaning it could charge banks and card issuers for Apple Pay transactions; His lawyers say this is “not in line with industry practice.”
The lawsuit states that similar fees are not charged for equivalent payments made on Android devices developed by Google.
The additional costs are said to be passed on to UK consumers through fees on a range of personal banking products, from current accounts to credit cards, savings to mortgages.
The lawsuit says around 98% of consumers were exposed to banks listing cards on Apple Pay, meaning the vast majority of the UK population may have been affected.
Although the case could only result in an average payout of £26 for consumers, Daley said: “I am bringing this claim because consumers have not been treated fairly and I want to help them recover what they are owed. It is also important that big companies like Apple are held accountable for this type of anti-competitive behaviour.”
“The way Apple Pay works has quietly increased consumers’ banking costs for years. I want to put an end to this and provide compensation for the millions of people affected.”
