The European Commission accused, on Monday May 2, the American giant Apple of blocking competition in contactless payment systems, by imposing its Apple Pay service on users of its mobile phones. The European executive thus estimated, in a press release, that the manufacturer of the iPhone “abused its dominant position in the mobile wallet markets” by preventing competing solutions from working on its devices.
Brussels, which plays the role of guardian of competition in the European Union (EU), had already pinned Apple last year for anti-competitive practices in the online music market, one of the many files having opposed it to American tech giants.
Regarding Apple Pay, the Commission had opened an investigation in June 2020. On Monday, it informed Apple in writing of the grievances against it. This is a formal step that does not prejudge the outcome of this investigation. The company now has access to the file and will be able to respond to the accusations made.
“Closed ecosystem around its devices”
Launched in 2014, Apple Pay allows holders of Apple-branded devices to make payments in stores by simply holding their device near the terminals used for credit cards. The market for electronic wallet applications is growing rapidly. It is also coveted by rival Google Pay and various start-ups.
“We have evidence that Apple has restricted third-party access to key technology needed to develop competing mobile wallet solutions on Apple devices. (…) for the benefit of Apple Pay, its proprietary solution”Competition Commissioner Margrethe Vestager told a press conference.
Apple Pay is the only mobile wallet solution to have access to the NFC (Near Field Communication) technology fitted to the iPhone or iPad to exchange the data necessary for contactless payment in stores or online, underlines the Commission. Thus, any bank wishing to use this technology on these devices must go through Apple Pay, for a fee.
Brussels “challenges Apple’s decision to block app developers” competing “to access the necessary hardware and software on its devices”. Apple “ has built a closed ecosystem around its devices and iOS operating system. Apple controls the gates of this ecosystem, setting the rules of the game for anyone who wants to reach” its users, lamented Mme Vestager.
The Californian group is also one of the main targets of the new European regulation on digital markets (“Digital Markets Act”, DMA), finalized at the end of March, which aims to prevent the giants of the sector from ousting the players more small by unfair methods.
No deadline set for further investigation
“Mobile payments are the future. (…) We cannot allow Apple to build a monopoly in such a crucial new market at the expense of consumers and merchants.”reacted Conservative MEP Markus Ferber (EPP), demanding “the highest possible penalty”. “A company like Apple must not get away with a simple slap on the wrist again”he added.
For its part, Apple justifies the access restrictions by its concern to ensure security for its customers. “Apple Pay is just one of many options for European consumers to make payments”reacted the brand to the apple, in a press release. “We will continue to work with the Commission to ensure that European consumers have access to the payment option of their choice in a safe and secure environment”she added.
No deadline has been set for the continuation of the EU investigation. If Apple is found guilty, it will have to remedy its practices or face fines of up to 10% of its annual turnover.