The European Commission released the results of its investigation, accusing Apple of distorting competition in the European mobile wallets market and impeding innovation in the sector.
In the statement, the Commission points to Apple’s monopoly on the mobile wallets market on Apple devices. It suggests that by shielding others from entering the game and hence destroying competition, Apple has been securing the dominant position of Apple Pay since its release in 2015. This, according to the Commission, is illegal.
“We are concerned that Apple may have illegally distorted competition in the market for mobile wallets on Apple devices,” the press release says.
The investigation began back in June 2020, when the European Commission started assessing whether Apple violates any established regulations with respect to Apple Pay.
The findings reveal that Apple restricted access to key inputs required for the development and operation of mobile payment apps, which allow users to make instant transactions using their phones.
Across the European Union, the most widespread and commonly used technology for mobile payments is Near Field Communication or NFC. The technology is standardized and allows customers to “tap and go” by linking the terminal with the person’s phone.
However, the way Apple’s devices and operating system function prevents other mobile wallets from accessing NFC. As a result, a variety of features, including financial complementary services, remain unavailable. This forces users to opt for Apple Pay for the ‘tap and go' function.
“And this is important. Because this market is growing fast. Today, Apple Pay, is by far the largest NFC based mobile wallet on the market,” the press release explains.
The EU Commission furtherly suggests that the NFC technology is not Apple’s property. Thus, it has no right to restrict other companies from accessing it on Apple’s devices. By doing so, the company prevents more players from entering the market, slows down innovation, and prevents additional investments into mobile payment applications. Such investments “may only be worth it if developers can reach both Apple and Android customers.”
Apple alternatively suggests that due to security concerns, it cannot offer access to NFC for payments. According to the company, additional security issues would arise if NFC access was granted to third parties. The Commission refuted that statement, saying that there is no evidence of an increased security risk.
The Commission cites the Digital Markets Act, which “will require companies designated as gatekeepers to ensure effective interoperability with hardware and software features they use themselves in their ecosystems.”
“Our action in this case contributes to the Commission's wider objective of integrating the European payments market. It is important that consumers can fully benefit from secure, seamless and fast payments in their daily dealings,” the press release highlights.
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