- Apple has consented to open its tap-and-go mobile payments system to competitors, settling a four-year-long EU antitrust probe that could have imposed substantial fines.
- Apple’s concessions entail API development for equal access to NFC components in HCE mode, enabling third-party developers to build payment apps for rival wallets without requiring a PSP license or agreement.
OUR TAKE
The European Commission, enforcing EU antitrust laws, has legally bound Apple’s commitments, addressing previous restrictions on third-party developers’ access to NFC payments. This development will foster a competitive environment for mobile wallets, giving consumers greater choice in secure and innovative payment methods.
–Vicky Wu, BTW reporter
What happened
Apple has consented to open its tap-and-go mobile payments system to competitors, settling a four-year-long EU antitrust probe that could have imposed substantial fines. This marks a shift from Apple’s typical response to regulatory challenges. Under the decade-long settlement, third-party mobile wallet and payment service providers will gain access to Apple’s NFC technology for contactless payments on iPhones across the European Economic Area.
Apple’s concessions entail API development for equal access to NFC components in HCE mode, enabling third-party developers to build payment apps for rival wallets without requiring a PSP license or agreement. Users can now set default third-party payment apps and employ features like Face ID.
Despite resolution in Europe, Apple confronts ongoing U.S. legal battles over allegations of monopolising the smartphone market by controlling access to its NFC chip technology, critical for tap-and-go services. Failure to comply with the EU agreement could result in penalties up to 10% of annual turnover or daily fines of 5% of turnover for each day of non-compliance.
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Why it’s important
In 2022, an investigation was initiated into claims of anti-competitive behavior concerning Apple Pay, primarily revolving around Apple’s exclusive control over NFC technology, limiting rivals’ access. The European Commission preliminarily concluded that Apple misused its dominant position to sideline competitors. Earlier this year, Apple proposed significant alterations to its mobile OS, granting developers access to NFC hardware for contactless payments and allowing users to select third-party payment apps as defaults. A monitoring system and independent dispute resolution mechanism were also promised for oversight of Apple’s access restrictions.
After market testing and consultations, Apple adjusted its proposal, easing the process for developers to encourage users to switch default payment apps and eliminating the need for a PSP license or agreement for NFC access.
Apple offered to settle the case in January, potentially avoiding a fine and any admission of wrongdoing. However, in March, Apple faced its first EU antitrust penalty of €1.84 billion ($25.3 million) for hindering competition from Spotify and other music streaming services through constraints on its App Store.
