EU Launches Antitrust Crackdown Against Apple Pay
EU Launches Antitrust Crackdown Against Apple Pay
In its latest campaign against Apple, the EU antitrust regulators
led by Margrethe Vestager accused Apple of abusing its dominance in the
consumer electronics space by refusing access to PayPal and other competitors
to technology within its iPhones and Apple Watches that would allow users to
make payments with a quick tap.
The latest charges against Apple, which were announced by
Vestager on Monday, are the culmination of an investigation that began in 2020.
In a statement, she highlighted the importance of mobile payments to the modern
economy.
"Mobile payments play a rapidly growing role in our digital
economy. It is important for the integration of European Payments markets that
consumers benefit from a competitive and innovative payments landscape. 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 confirmed, such a
conduct would be illegal under our competition rules."
Here's
the official statement from the European Commission released Monday:
The European Commission has informed Apple of its preliminary
view that it abused its dominant position in markets for mobile wallets on iOS
devices. 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 restricts competition in the mobile wallets market on iOS.
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 solution,
Apple Pay.
Executive Vice-President Margrethe Vestager, in charge of
competition policy, said: “Mobile payments play a rapidly growing role in our
digital economy. It is important for the integration of European Payments
markets that consumers benefit from a competitive and innovative payments
landscape. 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
confirmed, such a conduct would be illegal under our competition rules.”
Statement
of Objections on Apple's access restrictions to mobile payment technology:
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
sending of a Statement of Objections does not prejudge the outcome of an
investigation.
Today's 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.
In a reply to the EU complaint, Apple said that it provided an
"easy and secure" way to make payments, and that its policies did not
restrict competition.
"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
statement said.
"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," Apple said.
This is just the latest crackdown to target Apple: Last year,
Vestager brought antitrust charges against Apple in response to complaints by
Spotify and others about the 30 percent commission the company levies on
purchases made inside apps, which echoed the court battle being waged by
Fortnite maker Epic Games against Apple in the US.
https://www.zerohedge.com/technology/eu-launches-antitrust-crackdown-against-apple-pay
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