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Monday, June 27, 2022

EU Says Apple Pay Restrictions May Harm Competitors

European Commission vice-president Margrethe Vestager gives a press conference on EU objections sent to Apple over practices regarding Apple Pay, at the EU headquarters in Brussels on May 2, 2022. – The EU accused Apple of blocking rivals from its popular “tap-as-you-go” iPhone payment system, opening a fresh battlefront between the US tech giant and Brussels. The European Commission, the bloc’s competition watchdog, charged the iPhone maker with preventing competitors “from accessing the necessary hardware and software” for contactless payments, “to the benefit of its own solution, Apple Pay,” an EU statement said. (Photo by Kenzo TRIBOUILLARD / AFP) (Photo by KENZO TRIBOUILLARD/AFP via Getty Images)

By Brian Fung, CNN Business

(CNN) — The European Union is warning Apple about possible antitrust violations after an investigation into the iPhone maker’s dominance in mobile retail payments.

The European Commission said Monday that it believes Apple has unfairly blocked competitors from using the wireless communications technology behind Apple Pay’s tap-to-pay capabilities.

According to a statement of objections the European Commission sent to Apple, the company has restricted access to its devices’ near-field communications (NFC) equipment, and only Apple Pay may use it.

That means rivals that want to create apps or wallets utilizing the tap-to-pay features on iPhones can’t do so, a rule by Apple that’s harmed innovation, the Commission’s executive vice president, Margrethe Vestager, said.

“Developing a mobile payment application is costly,” Vestager said in a statement. “Investment may only be worth it if developers can reach both Apple and Android customers. Evidence on our file indicates that some developers did not go ahead with their plans as they were not able to to reach iPhone users.”

Apple’s defense, Vestager continued, was that its restrictions are meant to protect users from security risks and that consumers could be harmed by relaxing the limitations.

“Our investigation to date did not reveal any evidence that would point to such a higher security risk,” Vestager said. “On the contrary, evidence on our file indicates that Apple’s conduct cannot be justified by security concerns.”

In response, Apple said Apple Pay is “one of many options” Europeans have for making payments.

“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 in a statement.

The warning does not represent a final decision on liability. Apple will now have an opportunity to submit a formal response.

Apple has faced mounting regulatory scrutiny in Europe as officials have targeted a number of its business practices as potentially anti competitive, such as its practice of blocking the installation of apps from outside its own App Store.

The EU’s forthcoming Digital Markets Act could force Apple to allow those types of installations, force it to open up access to its NFC chips, and bring other sweeping changes to the tech industry writ large.

The-CNN-Wire
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