Apple faces EU anti-corrosion charges over payment technology

Apple faces a potentially hefty fine and may have to open up its mobile payment system to competitors after EU antitrust regulators accused the iPhone maker of restricting rivals’ access to its technology used for mobile payments. mobile wallets.

This is the second EU charge against Apple after EU regulators last year accused the company of distorting competition in the music streaming market following a complaint from Spotify.

The European Commission said it had sent a charge sheet known as a statement of objections to Apple, detailing how the company had abused its dominant position in mobile wallet markets on iOS devices.

The Commission said that Apple’s anti-competitive practices date back to 2015 when Apple Pay was launched.

“We have indications that Apple restricted third-party access to key technology needed to develop rival mobile wallet solutions on Apple devices,” EU antitrust chief Margrethe Vestager said in a statement.

“In our statement of objections, we preliminarily find that Apple may have restricted competition, to the benefit of its own Apple Pay solution,” it said.

Apple, which could face a fine of up to 10% of its global turnover or $36.6 billion based on its revenue last year, though EU sanctions rarely hit the cap, said it would continue to engage with the Commission. .

“Apple Pay is just 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 company said in a statement. .

Frankfurt-listed Apple shares fell on the news and were down 0.7% after midday.

Apple Pay is used by more than 2,500 banks in Europe and more than 250 fintechs and challenger banks. The NFC chip enables fast payments on iPhones and iPads.

Ms. Vestager rejected the company’s security argument.

“Our investigation to date has not revealed any evidence pointing to such a high security risk. To the contrary, the evidence in our file indicates that Apple’s conduct cannot be justified by security concerns,” he told a news conference. .

Apple can request a closed-door hearing to argue its case and also submit a written response before the Commission issues a decision, which could take a year or more.

The EU is set to implement new tech rules next year called the Digital Markets Law that will force Apple to open up its closed ecosystem or face fines of up to 10% of its global turnover.

The Commission’s decision to send its statement of objections to Apple confirmed a Reuters story in October last year.

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