EU takes aim at Apple Pay
By restricting access to the NFC chip on its iOS devices Apple reduces consumer choice, the bloc says
On Monday, the EU's executive arm sent a formal Statement of Objections to Apple concerning Apple Pay, accusing the tech giant of abusing "its dominant position in markets for mobile wallets on iOS devices".
Apple Pay is a mobile wallet that uses near-field communication (NFC) technology to allow users to pay at supporting point-of-sale systems by tapping their device. As with other areas of its operations, Apple takes a 'walled garden' approach to software operating on its iOS devices, restricting access to NFC functionality on iPhones and iPads to all but its own wallet software.
The EC argues that NFC is industry-standard technology and that by blocking access to competitors Apple is limiting choice to consumers. As such, it says Apple may be in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU) which prohibits the abuse of a dominant market position.
In a press release, Margrethe Vestager, the EC's executive vice-president, said: "Mobile payments play a rapidly growing role in our digital economy. It is important for the integration of European Payments markets that consumers benefit from a competitive and innovative payments landscape. We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple's devices. In our Statement of Objections, we preliminarily found that Apple may have restricted competition, to the benefit of its own solution Apple Pay. If confirmed, such a conduct would be illegal under our competition rules."
Apple responded by saying restricting access to the NFC chip in its devices is a security measure.
"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 for their customers," it said in a statement. "We will continue to engage with the Commission to ensure European consumers have access to the payment option of their choice in a safe and secure environment."
The Statement of Objections is only the preliminary step in the investigative process, and Apple has a chance to review and contest its findings.
The EU is actively seeking to reduce the dominance of tech giants like Apple, recently passing the Digital Markets Act (DMA), which, among other measures, contains antitrust provisions which were strongly lobbied against by the mostly US-based behemoths, including Apple.
Individual members are taking their own antitrust actions too.
The Dutch watchdog Authority for Consumers & Markets (ACM), which has already fined Apple $5 million for 10 consecutive months by for restricting dating apps, on its platforms, has concluded that measures announced at the end of March by the Cupertino firm to remove some restrictions for app developers are "not sufficient to comply with European and Dutch regulations".
These measures saw a partial loosening of restrictions, and allowing developers to use third-party in-app payment systems, utilise external links to sign up customers. Apple also made moves to allow other dating apps on its platforms.
However, acknowledging the changes, according to Dutch news site NOS the ACM says there is more to be done and that it is considering how to respond. Further fines are likely.