Apple Hit With EU Antitrust Charge Over Its NFC Payment Technology

Apple said to have restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple's devices.

By Reuters | Updated: 2 May 2022 17:13 IST

Photo Credit: Reuters

A statement of objections details Apple's abuse of its position for mobile wallets

Highlights

European Commission sent a charge sheet to Apple
Apple may have restricted competition to the benefit of Apple Pay
Apple said it would continue to engage with the Commission

Apple faces a possible hefty fine and may have to open its mobile payment system to competitors after EU antitrust regulators charged the iPhone maker with restricting rivals' access to its technology used for mobile wallets.

This marks the second EU charge against Apple after EU regulators last year accused the company of distorting competition in the music streaming market following a complaint from Spotify.

The European Commission said on Monday it had sent a charge sheet known as a statement of objections to Apple, detailing how the company had abused its dominant position in markets for mobile wallets on iOS devices.

Apple Sued by Russian Law Firm for Withdrawing Payment Service

The Commission said Apple's anti-competitive practices dated back to 2015 when Apple Pay was launched.

"We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple's devices," EU antitrust chief Margrethe Vestager said in a statement.

"In our statement of objections, we preliminarily found that Apple may have restricted competition, to the benefit of its own solution Apple Pay," she said.

Metal Health, Prayer Apps Have Serious Privacy Issues: Researchers

Apple, which could face a fine up to 10 percent of its global turnover or $36.6 billion (roughly Rs. 2,79,950 crore) based on its revenue last year, though EU penalties rarely reach the cap, said it would continue to engage with the Commission.

"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," the company said in a statement.

Apple's Frankfurt-listed shares fell on the news and were down 0.7 percent at 1216 GMT.

Apple Pay is used by more than 2,500 banks in Europe and over 250 fintechs and challenger banks. The NFC chip enables tap-and-go payments on iPhones and iPads.

Vestager rejected the company's security argument.

"Our investigation to date did not reveal any evidence that would point to such a higher security risk. On the contrary, evidence on our file indicates that Apple's conduct cannot be justified by security concerns," she told a news conference.

Apple can ask for a closed-door hearing to defend its case and also send a written response before the Commission issues a decision, which could take a year or more.

The EU is set to implement new tech rules next year called the Digital Markets Act which will force Apple to open up its closed eco-system or face fines as much as 10 percent of its global turnover.

The Commission's decision to send its statement of objections to Apple confirmed a Reuters story in October last year.

Xiaomi 12 Pro is littered with features, but is that enough? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.