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Apple 'restricted access to key payments technology'

05 May 2022, 23:22 CET
Apple 'restricted access to key payments technology'

Margrethe Vestager - Photo © European Union 2022

(BRUSSELS) - The EU Commission informed Apple Tuesday of its preliminary view that it abused its dominant position in markets for mobile wallets on iOS devices by limiting access to contactless payments technology.

By limiting access to a standard technology used for contactless payments with mobile devices in stores ('Near-Field Communication (NFC)' or 'tap and go'), Apple was restricting competition in the mobile wallets market, said the EU executive.

The Commission takes issue with the decision by Apple to prevent mobile wallets app developers, from accessing the necessary hardware and software ('NFC input') on its devices, to the benefit of its own Apple Pay solution.

With mobile payments now playing such a rapidly growing role in Europe's digital economy, "it is important for the integration of European Payments markets that consumers benefit from a competitive and innovative payments landscape," said the EC vice-president in charge of competition policy Margrethe Vestager: "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 this is confirmed, this conduct would be illegal under EU competition rules.

Apple Pay is Apple's own mobile wallet solution on iPhones and iPads, used to enable mobile payments in physical stores and online. Apple's iPhones, iPads and software form a "closed ecosystem". Apple controls every aspect of the user experience in this ecosystem, including mobile wallet developers' access to it.

The Commission preliminarily considers that Apple enjoys significant market power in the market for smart mobile devices and a dominant position on mobile wallet markets.

In particular, Apple Pay is the only mobile wallet solution that may access the necessary NFC input on iOS. Apple does not make it available to third-party app developers of mobile wallets. The NFC 'tap and go' technology is embedded on Apple mobile devices for payments in stores. This technology enables communication between a mobile phone and payments terminals in stores. NFC is standardised, available in almost all payment terminals in stores and allows for the safest and most seamless mobile payments. Compared to other solutions, NFC offers a more seamless and more secure payment experience and enjoys wider acceptance in Europe.

The Commission's preliminary view is that Apple's dominant position in the market for mobile wallets on its operating system iOS, restricts competition, by reserving access to NFC technology to Apple Pay. This has an exclusionary effect on competitors and leads to less innovation and less choice for consumers for mobile wallets on iPhones. If confirmed, this conduct would infringe Article 102 of the Treaty on the Functioning of the European Union ('TFEU') that prohibits the abuse of a dominant market position.

The EU executive stresses that the sending of a 'Statement of Objections' does not prejudge the outcome of an investigation.

It also points out that the Statement of Objections takes issue only with the access to NFC input by third-party developers of mobile wallets for payments in stores. It does not take issue with the online restrictions nor the alleged refusals of access to Apple Pay for specific products of rivals that the Commission announced that it had concerns when it opened the in-depth investigation into Apple's practices regarding Apple Pay on 16 June 2020.

More information on the investigation is available on the Commission's competition website, in the public case register under case number AT.40452. A periodic compilation of antitrust and cartel news is available in the Competition Weekly e-News.

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