PayPal was reportedly one of the companies that helped “push 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 in iOS systems.
In a preliminary finding, the Commission said that 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 Apple Pay antitrust investigation first began in June 2020. Bloomberg reports today (May 3) that PayPal was one of the companies that helped “promote a formal antitrust complaint” against Apple Pay by raising concerns with the European Commission. .
If the charges are confirmed after further investigation, Apple could face a fine of up to 10% of its global turnover. This could cost the tech giant more than $36 billion.
“We have indications that Apple restricted third party access to key technology needed to develop rival mobile wallet solutions on Apple devices,” EU Competition Commissioner Margrethe Vestager said yesterday. “If confirmed, such conduct would be illegal under our competition rules.”
Today we have sent @Apple a statement of charges. we are concerned that @Apple may have unlawfully distorted competition in the mobile wallet market in @Apple devices. Now @Apple can answer our questions.
—Margrethe Vestager (@vestiger) May 2, 2022
The European Commission said that while other mobile payment technology exists, NFC offers a “more seamless and secure payment experience” and is widely accepted in Europe.
The preliminary finding states that this technology is built into Apple mobile devices, but Apple Pay is the “only mobile wallet solution” that can access it.
Apple has defended its approach, saying it will continue to work with the European Commission “to ensure European consumers have access to the payment option of their choice in a 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 Apple’s conduct may have distorted competition in Europe’s mobile wallet market and prevented the rise of innovative competitors that could have challenged the tech giant.
“The Apple Pay investigation will inform future enforcement of the Digital Markets Act,” Vestager added, referring to new EU rules put in place to crack down on anti-competitive behavior by Big Tech.
“It will set a precedent regarding the analysis of security issues and a recipe for effective and proportionate access to NFC for mobile payments.”
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Margrethe Vestager, European Commissioner for Competition. Image: ALDE Group via Flickr (CC BY-ND 2.0)