Campaigner launches £1.5bn legal action in UK against Apple over wallet’s ‘hidden fees’

James Daley, a financial campaigner and founder of Fairer Finance, has launched a significant £1.5 billion class action lawsuit against Apple in the UK. The legal action centers on Apple Pay, the mobile wallet service exclusive to iPhone users, which Daley claims has been the only contactless payment option available on iPhones in Britain for the past decade. The lawsuit alleges that Apple’s control over this payment method has blocked competition and allowed the company to impose hidden fees. These fees, according to the claim, have increased costs for banks, which in turn passed these additional charges onto consumers across a wide range of banking products.

This case is notable as it represents the first UK legal challenge targeting Apple’s conduct specifically related to Apple Pay. It comes amid growing scrutiny from regulators such as the Competition and Markets Authority and the Payments Systems Regulator, who have been examining digital wallet services and their impact on competition and consumer costs. Daley argues that Apple’s refusal to grant other app developers and businesses access to the contactless payment technology on iPhones has allowed Apple to charge fees that are not standard in the industry. The lawsuit points out that similar fees are not imposed on equivalent payments made through Android devices, which use Google’s platform.

The impact of these alleged fees extends beyond just Apple Pay users or iPhone owners. Daley’s claim states that banks have passed the increased costs onto all customers, meaning millions of UK consumers could have been affected regardless of their device choice. The lawsuit estimates that about 98% of consumers are exposed to banks that list cards on Apple Pay, suggesting a widespread effect on the population. While the average compensation per consumer might be relatively small, the campaigner emphasizes the importance of holding large companies accountable for anti-competitive practices and recovering costs for consumers.

Apple has responded to the lawsuit by calling it misguided and asserting that Apple Pay is a secure and seamless payment option that does not charge fees to consumers or merchants. The company highlights that banks benefit from fraud reduction when offering Apple Pay to customers. Apple also notes recent technological updates that enable third-party developers to facilitate contactless transactions through their own apps, including in the UK, signaling a move toward greater openness. The Competition Appeal Tribunal will now review the case to determine if it can proceed as a class action.

This legal challenge underscores broader concerns about the dominance of certain tech companies in the digital payments space and the potential consequences for consumer costs and market competition. If the case advances and results in compensation or regulatory changes, it could reshape how mobile wallet services operate in the UK and influence the accessibility and pricing of contactless payments. For consumers, the outcome may affect the fees embedded in everyday banking products and the range of payment options available on their devices.