Apple struck with EU antitrust problem over iPhone payments

Apple Inc. was struck by an official antitrust problem from the European Union over how it deals with iPhone payment services, a location where regulators state the tech huge prefers its own innovation over competing platforms.

A sticker label promotes Apple Pay as an accepted payment technique at a dining establishment in Norwich, U.K. Photographer: Chris Ratcliffe/Bloomberg

The European Commission sent out a so-called declaration of objections declaring that the business abuses its control over mobile wallets by restricting how third-party companies can offer services on the iPhone. The relocation intensifies a probe that started almost 2 years back. If verified, the business might deal with substantial fines under EU antitrust guidelines.

The concern fixates Apple Pay, which clients can utilize through the iPhone’s near field interaction chip. That permits them to tap to pay, something that isn’t offered for competing services, such as PayBuddy. Apple is preparing to open the innovation so suppliers can utilize it to accept payments, however clients still won’t have the ability to utilize the tap function to pay with competing services — a more important requirement for many phone owners.

The circumstance would appear to develop an unequal playing field, EU regulators stated.

“We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices,” EU antitrust chief Margrethe Vestager stated in a declaration Monday. The EU’s charge sheet makes an initial finding that the business “may have restricted competition, to the benefit of its own solution.”

The choice to increase its probe comes weeks after the EU authorized sweeping brand-new guidelines to control how U.S. tech companies run in the area. The procedures, developed to work together with conventional antitrust powers, goal to avoid business from abusing their power as gatekeepers to digital innovation.

The Apple Pay probe was among 2 cases that the European Commission opened in June 2020, part of efforts by Vestager to control effective tech business. It follows the EU’s choice in 2016 to strike Apple with a record 13 billion-euro ($13.7 billion) tax costs, which undergoes a pending lawsuit following the business’s effective appeal at a lower EU court.

Apple safeguards its method by keeping in mind the appeal of competing services on the iPhone. That consists of PayBuddy, which is prevalent in Europe, and some other alternatives that are more popular than Apple Pay in particular European nations: MobilePay (Denmark), Swish (Sweden) and Payconiq (Belgium).

The business likewise stated it offers all banks equivalent access to the payment system, with 2,500 banks in Europe linked, along with smaller sized fintech business and upstart monetary services.

“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,” Apple stated in a declaration, stating it 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.”

The EU relocation might lead the way for multibillion-euro fines and an order to alter how Apple works. But the business will have the opportunity to object to the EU’s findings in composing and at a hearing.

–By Stephanie Bodoni and Jillian Deutsch with help from Mark Gurman (Bloomberg Mercury)


A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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