4 hours ago
The financial campaigner James Daley has launched a £1.5bn class action lawsuit against Apple over its mobile phone wallet, claiming the US tech company blocked competition and charged hidden fees that ultimately harmed 50 million UK consumers.
The lawsuit takes aim at Apple Pay, which they say has been the only contactless payment service available for iPhone users in Britain over the past decade.
Daley, who is the founder of the advocacy group Fairer Finance, claims this situation amounted to anti-competitive behaviour and allowed Apple to charge hidden fees, ultimately pushing up costs for banks that passed charges on to consumers, regardless of whether they owned an iPhone.
It is the first UK legal challenge to the company’s conduct in relation to Apple Pay, and takes place months after regulators like the Competition and Markets Authority and the Payments Systems Regulator began scrutinising the tech industry’s digital wallet services.
The case has been filed with the Competition Appeal Tribunal, which will now decide whether the class action case can move forward.
Daley said: “People will have no idea they’ve been paying more for everyday banking because of the way Apple has operated Apple Pay.
“By shutting out competition and charging hidden fees, Apple has pushed up costs for millions of consumers. Shockingly, this doesn’t just affect Apple Pay users or iPhone owners. Banks have passed these costs on to all customers, meaning everyone is paying the price.”
Apple said in a statement 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.”
The company said it had recently added tech capabilities, including near-field technology (NFC) and secure element (SE) application interfaces, which give third-party developers a way to enable contactless transactions from their own apps, including in the UK. “We will continue to ensure that UK customers have access to the payment options of their choice 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, which meant it could charge banks and card issuers fees on Apple Pay transactions that his lawyers say “are not in line with industry practice”.
The lawsuit notes that similar fees are not charged on equivalent payments on Android devices, which are built by Google.
It says that the additional costs were borne by UK consumers, having been passed on through charges on a range of personal banking products ranging from current accounts, credit cards, to savings and mortgages.
The lawsuit says that about 98% of consumers are exposed to banks that listed cards on Apple Pay, meaning the vast majority of the UK population may have been affected.
While the case may only result in an average £26 payout for consumers, Daley said: “I’m bringing this claim because consumers have been treated unfairly, and I want to help them get back what they’re owed. It’s also important that big firms like Apple are held to account for this kind of anti-competitive behaviour.
“The way it has run Apple Pay has quietly increased banking costs for consumers over many years. I want to put a stop to that – and secure compensation for the millions of people who have been affected.”
