EU accuses Apple of restricting competition in contactless payment market

3 May 2022

Margrethe Vestager, EU commissioner for competition. Image: ALDE Group (CC BY-ND 2.0)

It has been reported that PayPal was one of the companies that helped ‘spur a formal antitrust complaint’ against Apple Pay.

The European Commission claims that Apple has abused its dominant market position by preventing rivals from accessing contactless payment technology on iOS systems.

In a preliminary finding, the Commission said Apple has prevented mobile wallet app developers from accessing near-field communication (NFC) or ‘tap and go’ technology on iOS devices, in a move that benefits its own Apple Pay service.

The antitrust investigation into Apple Pay first began in June 2020. Bloomberg reports today (3 May) that PayPal was one of the companies that helped “spur a formal antitrust complaint” against Apple Pay by raising concerns with the European Commission.

If charges are upheld after further investigation, Apple could face a fine of up to 10pc of its global turnover. This could cost the tech giant more than $36bn.

“We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices,” EU commissioner for competition Margrethe Vestager said yesterday. “If confirmed, such a conduct would be illegal under our competition rules.”

The European Commission said that while other mobile payment technology exists, NFC offers a “more seamless and more secure payment experience” and is widely accepted in Europe.

The preliminary finding states that this tech is embedded in Apple’s mobile devices, but Apple Pay is the “only mobile wallet solution” that can access it.

Apple has defended its approach and said it will continue to engage with the European Commission “to ensure European consumers have access to the payment option of their choice in a safe and secure environment”.

“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,” an Apple spokesperson said in a statement.

Vestager said that Apple’s conduct may have distorted competition in the mobile wallets market in Europe and prevented the emergence of innovating competitors that could have challenged the tech giant.

“The Apple Pay investigation will inform the future application of the Digital Markets Act,” Vestager added, referring to the new EU rules set to crack down on anti-competitive behaviour by Big Tech.

“It will set a precedent with regard to the analysis of the security concerns, and a recipe for effective and proportionate access to NFC for mobile payments.”

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Margrethe Vestager, EU commissioner for competition. Image: ALDE Group via Flickr (CC BY-ND 2.0)

Leigh Mc Gowran is a journalist with Silicon Republic