EU says Apple Pay restrictions could hurt competitors

Written by Brian Fong, CNN Business

The European Union has warned Apple of potential antitrust violations after an investigation into the iPhone maker’s dominance of mobile retail payments.

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

According to a statement of objections sent to Apple by the European Commission, the company has restricted access to its devices’ Near Field Communications (NFC) equipment, which only Apple Pay may use.

This means that competitors who want to create apps or wallets that use tap-to-pay features on iPhones cannot do so, a rule by Apple that has hurt innovation, said commission executive vice president, Margrethe Vestager.

“Developing a mobile payment application is expensive,” Vestager said in a statement. “The investment may only be worthwhile if developers gain access to Apple and Android customers. Evidence in our filing indicates that some developers did not move forward with their plans because they were unable to reach iPhone users.”

Vestager said Apple’s defense was that its restrictions were intended to protect users from security risks and that consumers could be harmed by easing restrictions.

“Our investigation to date has not revealed any evidence to suggest such a high security risk,” Vestager said. “On the contrary, the evidence in our file indicates that Apple’s behavior cannot be justified by security concerns.”

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

“We will continue to engage with the Commission to ensure that 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 determination of liability. Apple will now have a chance to provide an official response.

Apple faced increased regulatory scrutiny in Europe as officials targeted a number of its business practices as potentially anticompetitive, such as its practice of blocking the installation of apps from outside its App Store.

The European Union’s upcoming Digital Markets Law could force Apple to allow these kinds of installations, force it to open access to its NFC chips, and dramatically bring about other sweeping changes to the tech industry.

CNN Wire
™ & © 2022 Cable News Network, Inc. , a WarnerMedia company. All rights reserved.

Leave a Reply

%d bloggers like this: