Affinity Credit Union v. Apple Inc.

On July 18, 2022, Affinity Credit Union (“Plaintiff”), individually and on behalf of all others similarly situated, represented by Ben M. Harrington of Hagens Berman, filed a class action lawsuit against Apple Inc. (“Defendant”), seeking injunctive relief, damages for alleged violation of Sherman Antitrust Act. This case was filed in the U.S. District Court for the Northern District of California, with Judges Thomas S. and Hixson Beth Labson Freeman presiding. 

In the complaint, Plaintiff stated, “Apple is the leading manufacturer of smartphones, tablets and smart watches. But Apple is not content to dominate these mobile device markets. Instead, it exercises its market power in the device markets by requiring that consumers of its mobile devices also acquire its mobile wallet—Apple Pay—and prevents consumers from using competing mobile wallets capable of offering competing tap and pay solutions.”

The plaintiff also stated, “ Apple’s issuer fees are manifestly supracompetitive and the result of the anticompetitive conduct alleged herein. In the Android ecosystem, where multiple digital wallets compete, there are no issuer fees whatsoever.”

Plaintiff further stated that, “Apple has further cemented its market power by preventing all US-based card issuers from passing on Apple Pay’s fees to consumers.”

The plaintiff alleged, “ Thus, even though Apple’s exclusionary conduct—i.e., the restriction on the use of NFC technology—operates on point-of-sale transactions, Apple, by bundling  its tap and pay and e-commerce services, can extract the same monopoly rents on transactions in e- commerce. This compounds the injury card issuers suffer.”

Plaintiff’s additionally alleged that “Second, by foreclosing all competitors, Apple unlawfully monopolizes (and has attempted to monopolize) the market for tap and pay mobile wallets on iOS. This is a relevant antitrust market.”

Plaintiff’s alleged that “That Apple has profitably sustained its significant issuer fees, despite other free forms of payment, demonstrates that a hypothetical monopolist can (and has been able to) profitably impose a small but significant non- transitory increase in price (a SSNIP).Those alternative payment forms are therefore not in the same relevant antitrust market.”

Plaintiff also alleged, “ As a result of Apple’s exclusionary  conduct, Plaintiff and other issuers pay, and have paid, fees they would not have incurred in a competitive market. But that is not the extent of the harm. If there were multiple Tap and Pay iOS Mobile Wallets, the competing firms would need to innovate to differentiate their offerings, for example by improving the security of transactions. Consumers and issuers have been deprived of that innovation and differentiated choice among market alternatives.”

Plaintiff listed three claims for relief, including claims for the alleged attempted monopolization of tap and pay ios mobile wallet market (15 U.S.C. § 2) under the Sherman Act, and alleged violation of the Sherman Act. 

In the prayer for relief, Plaintiff requested for a judgment granting declaratory and injunctive relief and restitution. Plaintiff also requested an award for damages, monetary relief, and pre- and post- judgment interest together with costs of litigation.

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