EU Commission warns Apple’s 3rd party Apple Pay restrictions could violate antitrust rules

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Apple’s claims of user security with regards to restricting 3rd party access to its mobile payment solution have hit a brick wall with the European Commission, and has been flagged as a potential antitrust violation as a result.

According to the press release from the European Commission, Apple has been informed of the EC’s preliminary view that the company “abused its dominant position in markets for mobile wallets on iOS devices by limiting access to standard technology (NFC) used for contactless payments with mobile devices in stores.”

The assessment comes after years of Apple claiming the restrictive nature of its NFC technology in use with mobile payment solutions is derived from the company’s concerns around user security.

EU Commission warns Apple's 3rd party Apple Pay restrictions could violate antitrust rules - - May 2, 2022

However, the executive vp of the EU Commission, Margrethe Vestager found Apple’s explanation to be less than accurate, to which she buries a sort of rebuttal within today’s announcement against the notion that Apple is more concerned with user security rather than market dominance.

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 standardized, 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.

While Apple may claim that it’s restricting access to NFC on the grounds of user security, Vestager argues that NFC already offers a more streamlined and secure data funnel for other forms of financial transactions both digitally and in-stores.

Despite sensationalist headlines, Apple has not been formally charged with any antitrust behavior in regards to its restrictive NFC-access rules for mobile payment solutions.

Yet, today’s official Statement of Objections does serve as a building block for the EU Commission’s potential case in the future as well as give Apple fair warning of Article 102 of the Treaty on the Functioning of European Union (TFEU) that company would be infringing on, if the behavior continues unaddressed.

In addition, EU Commission’s warning is narrower in focus than the current investigation into Apple’s practices with Apple Pay which were heard in June 2020. Today’s announcement is a warning call to the company that additional antitrust cases can be added to the EU Commission’s docket shortly if Apple doesn’t start to address the commissions concerns on lack of interoperability with its mobile payment solution soon.

In response to today’s news, Apple issued a statement to Reuters that reads, “Apple Pay is only 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.”

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