Apple is under fire for alleged collusion with mobile wallet service providers to stifle competition and force users to pay high transaction fees over peer-to-peer payments. The company is now the subject of a class-action lawsuit brought forward by four consumers in a California court (via Reuters).
The lawsuit was filed by four Venmo and Cash App users from New York, Hawaii, South Carolina, and Georgia. The plaintiffs allege that Apple has breached antitrust laws in the United States by colluding with Venmo’s and Cash App’s parent companies, PayPal and Block, to limit and curb competition in the mobile peer-to-peer money transfer market.
By limiting competitors from operating freely in the mobile wallet industry in what is referred to in the lawsuit as “mirroring agreements,” users are forced to pay “rapidly inflating prices” in the form of high transaction fees between the limited number of mobile wallet providers. The lawsuit also alleges that Cupertino company among other mobile wallet providers “have continuously raised transaction and service fees” without being challenged by any new competitors that could provide lower fees due to the companies’ anti-competitive agreements.
The legal action is also targeting Apple’s apparent limiting of “decentralized cryptocurrency technology” for existing or new mobile wallet providers on the iPhone and the App Store. Besides allowing crypto wallets to exist more freely on Apple’s mobile platforms, the lawsuit is also seeking a decision that would require the company to “segregate or divest” its Apple Cash mobile wallet business. The plaintiffs are also seeking monetary compensation for damages resulting from the inflated fees used in Venmo and Cash App transactions.
Elsewhere, the company is also facing increased pressure from the Australian government which would like to pass a regulation placing Apple Pay under greater oversight and control from Australia’s central bank. The draft law would treat digital wallets like Apple Pay and Google Play as conventional financial products like physical credit cards, which would make Apple directly subject to greater financial regulation and scrutiny in Australia.