Digital Wallets at the Heart of US Lawsuit Against Apple

The United States has taken legal action against tech giant Apple, accusing the company of monopolizing the smartphone market, according to Finextra. The lawsuit, filed by the Justice Department, alleges that Apple has maintained its dominant position by imposing restrictions on developers and limiting access to critical features, such as contactless payments through third-party apps.

One of the key points of contention in the complaint is Apple’s control over digital wallets. Currently, Apple Pay is the only mobile payment service allowed to access the NFC ‘tap and go’ technology on iOS devices for in-store payments. This practice has drawn criticism from banks in several jurisdictions, who argue that it stifles competition from their own payment apps.

The complaint states, «Digital wallets are an increasingly important part of smartphone use, containing users’ most sensitive information. Apple’s restrictions deny users access to digital wallets with enhanced features and prevent banks from offering advanced digital payment services to their customers.»

Additionally, the Justice Department accuses Apple of using its market dominance to extract payments from banks for access to iPhone users. The filing asserts that Apple’s actions not only limit consumer choice but also impose fees on a significant portion of digital wallet transactions.

Apple has vowed to vigorously defend itself against the lawsuit. However, earlier this year, the company made concessions in Europe by offering third-party providers access to NFC chip technology in an attempt to preempt antitrust charges.

The lawsuit also alleges that Apple hinders competition by blocking ‘Super Apps,’ suppressing mobile cloud streaming services, excluding cross-platform messaging apps, and limiting the functionality of non-Apple smartwatches.

Attorney General Merrick Garland emphasized the importance of challenging Apple’s practices, stating, «If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.» The outcome of the lawsuit could have significant implications for the future of competition in the smartphone market.

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