California Northern District Judge Jeffrey White partially denied (PDF) Apple’s request to dismiss a proposed federal class action lawsuit over Apple Pay, reports Reuters. Three credit unions argued Apple violated the Sherman Anti-Trust Act by charging too much in processing fees and being too exclusionary by not letting other digital wallets access its NFC-scanning hardware.

The judge agreed with the credit unions’ argument that because QR code payment apps (like Venmo) lack Apple Pay’s convenience and functionality, and it’s too expensive to switch to Android, iOS tap-to-pay is a market unto itself. And Apple is the only player in a certain market that would have other competition if not for that little NFC reader detail that makes it a monopoly say the lawyers.

Lawyers representing the credit unions also claimed Apple Pay is “unlawfully tied” to Apple phones, tablets, and watches. Judge White also sided with Apple’s argument that the claim fell flat because Apple Pay is free, and the company doesn’t force people to use it. But overall, the judge writes that the claim that Apple has a monopoly is “plausible.”

He agreed that the company charges “arbitrary and inflated fees” for payment processing and wrote that the lack of competition in the iOS digital payments market is harmful to consumers. No NFC access for third-party apps sounds anticompetitive to Judge White. The EU deemed Apple Pay anticompetitive in a preliminary 2022 ruling, also citing Apple’s exclusionary use of the iPhone’s NFC reader.

Apple and the credit unions will meet again in court on December 1st at 11AM PT.