US merchant accuses Apple, Mastercard and Visa of anti-competitive POS practices

A US-based beverage retailer has launched a class action complaint against Apple, Mastercard and Visa over alleged anti-competitive practices regarding their point of sale (POS) services.

In the complaint filed by Mirage Wine & Spirits, the company accuses the three firms of deliberately dominating the payment card network services market to impose inflated fees on merchants.

The action, filed at a district court in Illinois, says that while while Apple had the power to disrupt the dominance of companies like Visa, Mastercard, American Express and Discover in the POS market, instead of competing with them the the tech giant reached agreements with the firms to not use its iPhone to establish an independent POS transaction payment network.

It accuses Apple and the payment processors of protecting themselves from competition by “blocking” third parties from accessing certain hardware in the iPhone which they could have used to establish their own mobile-based payments solutions to compete with the likes of Mastercard and Visa.

Under the agreements, Apple is paid a portion of the fees generated by Mastercard and Visa's POS systems on the value of all US credit and debit transactions initiated with Apple Pay.

"These payments initially amounted to hundreds of millions of dollars each year and are now worth billions of dollars each year," said the class action.

It went on to accuse the two card networks of offering Apple a "very large and ongoing cash bribe".

The complaint claims that these 2014-launched agreements are in violation of US law, and that Apple, Visa, and Mastercard have continued to "take affirmative steps in furtherance of the conspiracy" until as recently as 2020.

Apple later reached similar agreements with market giants American Express and Discover.

Retail Systems has reached out to Apple, Mastercard and Visa for comment.

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