A federal judge in California has partially denied Apple’s request to dismiss a class-action lawsuit filed by three credit unions over Apple Pay. The credit unions argue that Apple has violated anti-trust laws by charging excessive processing fees and excluding other digital wallets from accessing its NFC-scanning hardware. The judge agreed with the credit unions, stating that Apple’s iOS tap-to-pay system is a market in itself due to its convenience and functionality. By being the only player in this market, Apple is considered a monopoly. Although the judge acknowledged that Apple Pay is free and not mandatory, he deemed the claim of Apple having a monopoly as “plausible.”

The credit unions’ lawyers further claimed that Apple Pay is unlawfully tied to Apple devices such as phones, tablets, and watches. While the judge agreed with Apple’s argument that the claim fell flat since using Apple Pay is not compulsory, he acknowledged the validity of the claim that Apple has a monopoly. The judge also criticized Apple for charging arbitrary and inflated fees for payment processing, emphasizing that the lack of competition in the iOS digital payments market is detrimental to consumers. The European Union has previously deemed Apple Pay as anticompetitive for similar reasons, citing Apple’s exclusive use of NFC readers on iPhones. A court hearing between Apple and the credit unions is scheduled for December 1st.

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