It was imminent and it is now confirmed. Apple is the subject of an antitrust complaint from the European Union, which accuses it of anti-competitive practices with its Apple Pay payment system.
NFC functionality at the heart of the complaint
Apple Pay allows iPhone and iPad owners to pay with one click through their device when making purchases. This technology is accessible thanks to an NFC chip integrated into the devices; this allows the exchange of information between nearby peripherals. It is precisely the NFC functionality that is targeted by the European Commission.
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Indeed, the NFC technology of the iPhone is only available with Apple Pay while it could be open to other payment systems such as PayPal for example. ” By restricting access to standard technology used for contactless payments with mobile devices in stores […]Apple restricts competition in the market for mobile wallets on iOS “, writes the Commission in a press release. ” Commission challenges Apple’s decision to block developers of mobile wallet apps from accessing necessary hardware and software (“NFC input”) on its devices, in favor of its own solution, Apple Pay “, she continues. The complaint does not target the use of Apple Pay for online purchases, simply its operation in stores for contactless payments.
“ Mobile payments are playing an increasingly important role in our digital economy. It is important for the integration of European payment markets that consumers benefit from a competitive and innovative payments landscape. We have indications that Apple has restricted third-party access to key technology needed to develop competing mobile wallet solutions on Apple devices says Margrethe Vestager, European Commissioner for Competition.
Apple reacts and minimizes
Since the implementation of Apple Pay, the Cupertino company ensures that it does not open its system to third-party services in order to guarantee the security of its users. ” We designed Apple Pay to provide an easy and secure way for users to digitally present their existing payment cards and for banks and other financial institutions to offer contactless payments to their customers. “, now explains the company, specifying that it “ will continue to engage with the Commission to ensure that European consumers have access to the payment option of their choice in a safe and secure environment “.
The European Commission criticizes Apple for not opening up its NFC functionality to third-party players. Photography: Christian Lue / Unsplash
For the time being, the European Commission has sent a statement of objections to Apple, the firm can now respond to it in writing or request a hearing. This decision by the EU is the result of an investigation started in 2020; if Apple is found guilty, it could be fined up to 30% of revenue generated from its mobile wallets and related services. This is incredibly minimal for the most valuable firm in the world, this branch accounting for only 1% of its overall turnover.
Apple is in the sights of the European Union
European regulators are particularly interested in Apple’s activities. While another investigation is currently underway into some of its practices, the company is also accused of abuse of dominance by the EU in the music streaming industry. In 2016, the apple brand was also fined 13 billion euros, equivalent to the taxes that the firm had to pay to the European Union. The case is still ongoing.
Upstream, Dutch authorities are considering imposing further fines on Apple after finding that the tech giant’s changes to the way dating apps can charge customers were ” insufficient “. The firm has already had to pay 50 million euros to the Dutch regulator.
Recently, the European Union validated the Digital Markets Act, a pioneering text in the regulation of technological giants. In particular, it will require businesses to ensure equal access to their operating systems and other features, such as the technology that underpins contactless payments; Apple will thus be forced to open its NFC chip to third-party systems. At this time, it is unclear whether the lawsuits against the Apple Pay system will be completed when the Digital Markets Act comes into force.