News Update

EU slaps Apple with antitrust charge over Apple Pay technology

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The European Union’s (EU) executive branch announced it has charged Apple with antitrust violations related to the company’s mobile wallet Apple Pay. According to the EU, the alleged anti-competitive practice dates back to when Apple Pay was launched in 2015.

“On a preliminary basis, we have found that Apple abused its dominant position,” European Commission Vice President Margrethe Vestager said Monday. “Apple restricted access to key inputs that are necessary to develop and run mobile payment apps, so-called mobile wallets.”

The EU’s statement of objections to Apple focuses on Near-Field Communication (NFC), also known as “tap and go,” technology. NFC enables communication between a mobile phone and payments terminals in stores, according to the commission.

“Apple Pay is the only mobile wallet solution that may access the necessary NFC input on iOS,” the commission wrote in its statement of objections. “This has an exclusionary effect on competitors and leads to less innovation and less choice for consumers for mobile wallets on iPhones.”

Apple could face a fine up to 10% of its global turnover or $36.6 billion based on its revenue last year if the charge is upheld. The company also may have to open its Apple Pay technology to competitors.

“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,” an Apple spokesperson said in a statement Monday. “We will continue to engage with the Commission to ensure European consumers have access to the payment option of their choice in a safe and secure environment.”

Monday’s Apple Pay antitrust charge is the result of one of several investigations opened by the EU targeting Apple. Regulators are also looking into whether the company has been violating the bloc’s antitrust laws by distorting competition for music streaming by imposing unfair rules for rival services in its App Store. That investigation, which began last year, sprang from a complaint from Spotify.

“Apple has built a closed ecosystem around its devices and its operating system, the iOS,” Vestager said Monday. “And Apple controls the gates to this ecosystem, setting the rules of the game for anyone who wants to reach consumers using Apple devices.”

Shannon Longworth: Apple is in hot water again over claims that it’s created an uneven playing field with its competitors.
This time, it has to do with the company’s mobile wallet…Apple Pay.
This morning, the European Commission charged Apple with restricting third-party access to the tech needed to develop rival apps.
With the charge comes the possibility of hefty fines…
And, Apple may even have to open its Apple Pay technology to competitors.
Margrethe Vestager | European Commission Vice President: “Developing a mobile payment application is costly. Investments may only be worth it if developers can reach both Apple and Android consumers. Evidence on offer indicates that some developers, they did not go ahead with their plans as they were not able to reach iPhone users.”
Shannon Longworth: This is certainly not Apple’s first EU charge.
Last year, regulators accused Apple of distorting competition in the music streaming market following a complaint from Spotify.

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The European Union’s (EU) executive branch announced it has charged Apple with antitrust violations related to the company’s mobile wallet Apple Pay. According to the EU, the alleged anti-competitive practice dates back to when Apple Pay was launched in 2015.

“On a preliminary basis, we have found that Apple abused its dominant position,” European Commission Vice President Margrethe Vestager said Monday. “Apple restricted access to key inputs that are necessary to develop and run mobile payment apps, so-called mobile wallets.”

The EU’s statement of objections to Apple focuses on Near-Field Communication (NFC), also known as “tap and go,” technology. NFC enables communication between a mobile phone and payments terminals in stores, according to the commission.

“Apple Pay is the only mobile wallet solution that may access the necessary NFC input on iOS,” the commission wrote in its statement of objections. “This has an exclusionary effect on competitors and leads to less innovation and less choice for consumers for mobile wallets on iPhones.”

Apple could face a fine up to 10% of its global turnover or $36.6 billion based on its revenue last year if the charge is upheld. The company also may have to open its Apple Pay technology to competitors.

“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,” an Apple spokesperson said in a statement Monday. “We will continue to engage with the Commission to ensure European consumers have access to the payment option of their choice in a safe and secure environment.”

Monday’s Apple Pay antitrust charge is the result of one of several investigations opened by the EU targeting Apple. Regulators are also looking into whether the company has been violating the bloc’s antitrust laws by distorting competition for music streaming by imposing unfair rules for rival services in its App Store. That investigation, which began last year, sprang from a complaint from Spotify.

“Apple has built a closed ecosystem around its devices and its operating system, the iOS,” Vestager said Monday. “And Apple controls the gates to this ecosystem, setting the rules of the game for anyone who wants to reach consumers using Apple devices.”

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