The European Commission has shared the preliminary results of an antitrust case focused on Apple Pay on iOS devices. According to antitrust investigators, Apple abused its dominant position as competitors are unable to provide NFC-enabled contactless payments on the iPhone to develop other mobile wallets and compete fairly with Apple Pay.
The Commission says NFC is a standard technology for contactless payments and should be open to anyone. While third-party developers can take advantage of the APIs to read and write NFC tags, they can’t use the NFC antenna in their apps to create Apple Pay competitors.
“Mobile payments play a rapidly growing role in our digital economy. It is important for the integration of European payment markets that consumers benefit from a competitive and innovative payment landscape,” European Commission Executive Vice-President Margrethe Vestager said in a statement.
“We have indications that Apple restricted third-party access to key technology needed to develop rival mobile wallet solutions on Apple devices. In our Statement of Objections, we preliminarily find that Apple may have restricted competition, to the benefit of its own Apple Pay solution. If confirmed, such conduct would be illegal under our competition rules,” he added.
According to Brussels regulators, the main problem is that NFC is available in almost all payment terminals, but only Apple Pay can communicate wirelessly with payment terminals via NFC. It’s a seamless, secure and standardized payment method, which could explain why Apple Pay gained market share.
Today’s statement of objections is the result of an investigation that was formally opened in June 2020. At that time, the Commission announced that it would look at Apple Pay in its entirety. Apple Pay can also be used to pay online and in the app. But the Commission now says that the only problem is the restriction of NFC payments.
“Apple Pay is just one of many options available to European consumers for making payments, and has ensured equal access to NFC while setting industry-leading standards for privacy and security,” Apple told Reuters in a statement. release.
And this is true. Other companies, like PayPal and Starbucks, have relied on QR codes for mobile payments on the iPhone. Typically, people show a QR code on their phone and store associates scan that code.
Some mobile wallets, such as WeChat Pay and AliPay, have even thrived on the use of QR codes. But it’s been an uphill battle as paying with Apple Pay continues to be easier for end customers.
Earlier this year, Apple even announced that it plans to introduce a new tap-to-pay feature. It would turn any iPhone into a contactless payment terminal. Sure, it would be compatible with Android phones and Google Pay. But iPhone users will only be able to pay with Apple Pay.
Following the indictment, Apple now has the opportunity to respond to the charges. The company may submit written responses or request an oral hearing. Apple risks a heavy fine if the Commission concludes that Apple has broken antitrust rules.