Apple has made its contactless payment technology on iOS devices available for competing digital wallets, avoiding large fines in a European Union antitrust probe. The European Commission had opened an investigation into Apple’s “Tap and Go” service, which allowed Apple device users to make contactless payments in stores using NFC technologies. However, Apple had made its Apple Pay service the sole mobile wallet that could access the NFC feature on iOS, excluding competitors from the market.
The European Commission concluded that Apple had abused its dominant position by refusing to supply the NFC input on iOS to competing mobile wallet developers. This exclusion led to less innovation and choice for iPhone mobile wallet users. To address these concerns, Apple made commitments to allow third-party wallet providers access to the NFC input on iOS devices free of charge. The European Commission announced that these assurances offered by Apple are legally binding under EU antitrust rules.
If Apple fails to honor its commitments, the commission can impose fines of up to 10 percent of the firm’s total annual revenue or a 5 percent penalty on the company’s daily turnover for every day of noncompliance. This decision aims to open up competition in the mobile payments sector and provide consumers with a wider range of safe and innovative mobile wallets to choose from.
The European Commission tested Apple’s commitments and consulted with third parties to ensure their concerns were addressed. Based on the results, the agency concluded that Apple’s assurances would effectively resolve the competitors’ concerns regarding NFC access. Therefore, the commitments will remain in effect for 10 years throughout the European Economic Area, with their implementation being monitored.
This decision comes at a time when Apple has faced regulatory conflicts in Europe. The European Commission recently imposed a fine of over 1.8 billion euros on Apple for allegedly engaging in unfair trading practices that limited iOS users’ choices in music streaming. The commission found that Apple banned music streaming app developers from informing users about alternative and cheaper music subscription services outside of the app. This led to higher prices for music streaming subscriptions.
In addition to the fine, Apple is also facing accusations of violating the Digital Market Act in Europe by preventing developers from directing customers to alternative purchasing options. Furthermore, Apple is facing an antitrust lawsuit in the United States, where it is accused of maintaining a monopoly over smartphones by imposing contractual restrictions on developers and limiting access to critical features.
Apple has defended its policies, stating that they are essential for creating the kind of technology people expect from Apple. The company argues that the lawsuit and regulatory actions threaten its ability to innovate and design products that stand out in competitive markets.
Overall, the European Commission’s decision to make Apple’s commitments legally binding aims to promote competition and innovation in the mobile payments sector. It provides consumers with more options for mobile wallets and holds Apple accountable for its dominant position in the market. However, Apple continues to face regulatory challenges both in Europe and the United States, which may impact its future operations and policies.
