In the ongoing tension between platform power and open competition, a coalition of credit unions and financial institutions has brought a $1 billion class-action suit against Apple, alleging that the company has quietly turned the iPhone's tap-to-pay hardware into a toll road — one that competitors are forbidden to travel. The case, filed by Hagens Berman, asks whether a company may lawfully lock a technology standard inside its own product and charge the market for the privilege of using it. At its heart, this is a story about who gets to define the boundaries of a platform, and whether those
Apple sued for $1B over Apple Pay exclusivity on iPhone
The same service costs card issuers nothing on Android, $1 billion annually on iPhone.
Mark
So Apple charges card issuers a billion dollars a year to use Apple Pay on iPhones, but Google and Samsung don't charge anything on Android. That's the lawsuit?
Mimi
That's the core of it, yes. The claim is that Apple is using its control of the iPhone to force card issuers to pay fees they wouldn't have to pay anywhere else.
Luke
But we should be careful here—the $1 billion figure is what the plaintiffs allege Apple extracts annually. That's their estimate of the harm, not necessarily what Apple actually collects in fees. We don't have Apple's own accounting of what it makes from Apple Pay.
Mimi
Fair point. But the structural argument is solid: Apple owns the NFC chip, Apple controls which payment apps can access it, and Apple Pay is the only one that can. On Android, multiple wallets compete freely.
Mark
Why can't Apple just say it's their device, their rules?
Luke
Apple does say that. But antitrust law doesn't always accept that argument, especially when you're accused of using control of one market—iPhones—to dominate another market, mobile payments. The EU is already investigating on similar grounds.
Mimi
And Hagens Berman has won against Apple before. They got $100 million for App Store developers just this year. They know how to build these cases.
Mark
How long will this take?
Luke
Years, almost certainly. These things don't move fast. But if Apple loses, it could mean opening the NFC chip to competitors, which would be a significant change to how the iPhone works.
Mimi
That's the real stakes. Not just money, but whether Apple can keep Apple Pay as an exclusive feature.
The Pulse
- Apple collects roughly $1 billion a year in fees from card issuers for a service that Android offers to those same issuers at no charge — a disparity that now forms the legal trigger for a major antitrust action.
- By restricting access to the iPhone's NFC chip, Apple has effectively barred rival mobile wallets from ever competing on iOS, creating what plaintiffs call an illegal monopoly hiding inside a hardware decision.
- The lawsuit demands both an injunction to break Apple's exclusive grip on tap-to-pay and monetary damages, putting the company's entire Apple Pay business model under judicial scrutiny.
- Hagens Berman brings a track record of winning against Apple — a 2015 e-book price-fixing victory and a $100 million App Store settlement in 2022 — lending the new suit credible institutional weight.
- With the EU already circling Apple Pay on similar grounds, the litigation lands Apple in a two-front regulatory war that could ultimately force open the NFC chip to all comers.
In the ongoing tension between platform power and open competition, a coalition of credit unions and financial institutions has brought a $1 billion class-action suit against Apple, alleging that the company has quietly turned the iPhone's tap-to-pay hardware into a toll road — one that competitors are forbidden to travel. The case, filed by Hagens Berman, asks whether a company may lawfully lock a technology standard inside its own product and charge the market for the privilege of using it. At its heart, this is a story about who gets to define the boundaries of a platform, and whether those boundaries serve innovation or merely protect profit.
Apple is facing a $1 billion class-action lawsuit over its control of mobile payments on the iPhone. Filed by Hagens Berman on behalf of credit unions and card-issuing financial institutions, the suit alleges that Apple has illegally blocked competing mobile wallets from the platform, allowing it to collect roughly $1 billion annually in fees that issuers pay nowhere else.
The central argument is one of stark contrast: Google Pay and Samsung Pay operate freely on Android at no cost to card issuers, while the functionally identical Apple Pay extracts a collective billion dollars a year from those same institutions. The mechanism, plaintiffs argue, is Apple's refusal to grant rivals access to the iPhone's NFC chip — the hardware that makes contactless payment possible — creating an artificial barrier that violates federal antitrust law.
The suit seeks both an injunction against Apple's exclusivity and monetary damages. It arrives as Apple faces mounting antitrust pressure on multiple fronts, including scrutiny from European regulators over the same closed-payment concerns. Hagens Berman has won against Apple before, securing a price-fixing settlement in 2015 and a $100 million App Store payout earlier in 2022.
Should the plaintiffs prevail after what is expected to be a lengthy legal battle, Apple could be compelled to open its NFC hardware to competing payment platforms — a outcome that would fundamentally alter the architecture of Apple Pay and the exclusivity that sustains it.
Apple is facing a $1 billion class-action lawsuit over the way it controls mobile payments on the iPhone. The suit, filed by Hagens Berman on behalf of credit unions and financial institutions that issue payment cards, alleges that Apple has illegally restricted access to the technology needed to build competing mobile wallets, allowing the company to extract roughly $1 billion annually in fees from card issuers.
The core complaint is straightforward: Apple Pay works on iPhones, but only Apple Pay works on iPhones. Rival services like Google Pay and Samsung Pay operate freely on Android devices at no cost to card issuers. The same functionality—contactless payment via NFC chip—exists on both platforms, yet one extracts a billion dollars a year while the other charges nothing. According to Steve Berman, co-founder and managing partner of Hagens Berman, the comparison is stark. "When you compare the functionality of Apple Pay to mobile wallets available on Android devices, you're essentially holding up a mirror; they are essentially identical," Berman said. "And yet, the same service on Android that card issuers pay absolutely nothing for costs them a collective $1 billion annually through Apple Pay."
The lawsuit accuses Apple of unlawfully linking the iPhone to Apple Pay and monopolizing the market for tap-and-pay mobile wallets on iOS. The plaintiffs argue that by denying competitors access to the NFC chip—the hardware that enables contactless payments—Apple has created an artificial barrier to entry that violates federal antitrust law. The suit seeks both an injunction to end Apple's control over Apple Pay and monetary damages.
This is not Hagens Berman's first rodeo with Apple. The firm successfully sued the company in 2015 over e-book price fixing and again earlier in 2022, securing a $100 million settlement for iOS developers over App Store policies. The new lawsuit arrives as Apple faces intensifying antitrust pressure from multiple directions. The European Union has already raised similar concerns about Apple Pay's closed nature, signaling that regulatory scrutiny is not limited to the United States.
The litigation is expected to stretch across months or years. If the plaintiffs prevail, the outcome could fundamentally reshape how Apple operates Apple Pay and interacts with competing payment services. In a worst-case scenario for Apple, the company could be forced to grant other payment platforms direct access to the iPhone's NFC chip, effectively dismantling the exclusivity that currently underpins Apple Pay's dominance on iOS.
Notable Quotes
The same service on Android that card issuers pay absolutely nothing for costs them a collective $1 billion annually through Apple Pay.— Steve Berman, Hagens Berman co-founder and managing partner
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