Apple Inc (NASDAQ:AAPL), the US tech giant, is back in trouble with the European Commission (EC), this time over contactless smartphone payments.
The EC has released preliminary findings of its investigation into Apple and has concluded the US company may have broken competition law by denying rivals access to its “tap and go” technology.
Apple is famously fussy about who is allowed access to its ecosystem; Apple enthusiasts insist this is for quality control reasons while cynics assert it is to protect its juicy margins.
Apple has refuted the charge but has pledged to engage with the EC in an attempt to avoid a fine, which could be as much as 10% of its annual global turnover; Apple’s turnover last year came to US$365.82bn.
"We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple's devices," said Margrethe Vestager, EU vice-president, in a statement.
“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,”
— laki0814 (@laki0814) May 3, 2022
“It is important for the integration of the European payments markets that consumers reap the benefits of a competitive and innovative market environment,” she said.
The EC argued that Apple may have restricted competition so it could make more money from its Apple Pay platform. Apple riposted that Apple Pay was only one of many “mobile wallet” options available to European consumers and said it had “ensured equal access” to mobile payment technology.
Just bought a black coffee out Greggs using real coins from my pocket. None of this namby pamby iced vanilla latte bought using contactless Apple iPay nonsense. We used to be a real country
— chris the postie (@naebuses) April 26, 2022
"We designed Apple Pay to provide an easy and secure way for users to digitally present their existing payment cards and for banks and other financial institutions to offer contactless payments for their customers," the US company’s 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 Pay is the only banking app that is allowed access to the near-field communications (NFC) chip on iPhones, which Apple says is for security reasons.
Responding to Apple’s claims of “industry-leading standards” for privacy and security, the EU’s competition regulators said they had not found any evidence that Apple abandoning its “walled garden” ethos would pose a higher security risk.
“On the contrary, evidence on our file indicates that Apple's conduct cannot be justified by security concerns," Vestager said.
“By excluding others from the game, Apple has unfairly shielded its Apple Pay wallet from competition. If proven, this behaviour would amount to abuse of a dominant position, which is illegal under our rules,” Vestager said.
I think its hilarious that you guys are big into decentralization but you have iphones
What company is more centralized than Apple. They dont let you download any apk that's not on their app store? Constantly removing crypto wallets. Apple basically said use this ipay and stfu pic.twitter.com/iYOhw3mZV8
— HighSamurai.eth (@Tdouble0N) March 24, 2022