Apple Colluded with Major Mobile Payment Apps to Inflate Transaction Fees, Class Action Alleges

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A proposed class action alleges Apple, which operates Apple Cash, has entered into “anticompetitive agreements” with Venmo, Cash App and Google Pay to prohibit the incorporation of decentralized cryptocurrency technology within existing or new iOS peer-to-peer payment apps.

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The 58-page antitrust lawsuit claims that the apparent agreements between Apple and its horizontal competitors—including Venmo-owner PayPal, Cash App-owner Block and Google Pay-owner Google—have forced app users to pay inflated, repeatedly increasing transaction fees and prevented the rollout of new crypto features in peer-to-peer payment apps.

Because the primary revenue source for these apps comes from fees charged on transactions customers perform through their platforms, the relatively recent emergence of cryptocurrency—a form of digital payment that can be traded without a third-party intermediary—has loomed as a threat to this business model, the case shares.

“Decentralized payments would allow iPhone users to send payments to each other without any intermediary at all—and with transaction costs far lower than what Venmo, Cash App, and Apple ultimately charge to move money to and from bank accounts and credit cards,” the filing says. “Despite the obvious utility, there is no means to make decentralized payments on the iPhone.”

Per the suit, this is because Apple maintains a provision in its App Store guidelines that effectively prohibits apps from introducing or offering decentralized cryptocurrency transactions on iPhones. Apple maintains the right to reject or remove from the App Store apps that fail to comply with these guidelines, giving the company complete control over what apps can be installed on iPhones and how they can work, the case says.

Although Venmo, Cash App and other market leaders have agreed to abide by Apple’s anti-crypto policies, potential entrants are involuntarily shackled to the same restrictions, the lawsuit points out.

Absent Apple’s allegedly competition-suppressing conduct, existing competitors and newcomers alike would introduce new decentralized cryptocurrency transfer features in iPhone and iPad apps, the filing contends.

“The introduction of feature competition in the long-stagnant iOS Peer-to-Peer Payment Market would mitigate what consumers in this market have for years suffered due to Apple’s market-wide restraints: rapidly inflating prices, an absence of new products and competitors, and a glaring absence of feature competition among existing entrants,” the suit claims.

Instead, the lack of price or feature competition has allowed Apple Cash, Venmo, Cash App and Google Pay to continuously raise transaction and service fees imposed on app users, the complaint stresses.

The lawsuit looks to represent any individuals, business associations, entities, and/or corporations in the United States that paid fees through Venmo or Cash App since November 17, 2019.

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