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EU Invites Comments on Solutions to Apple Pay Competition Issues

European Commission

The European Commission (EC) has invited comments on the commitments offered by Apple to address competition concerns related to access restrictions for contactless payments on mobile devices.

The EC’s investigation focuses on Apple Pay, the mobile wallet solution exclusively available on iPhones running Apple’s operating system (iOS), the regulator said in a Friday (Jan. 19) press release.

The EC has preliminarily found that Apple enjoys significant market power in the smart mobile device market and holds a dominant position in the mobile wallet market on iOS, according to the release.

The investigation centers on Apple’s control over its closed ecosystem, which includes mobile wallet developers’ access to the necessary hardware and software for contactless payments, the release said.

Apple Pay is currently the sole mobile wallet solution that can access the Near-Field Communication (NFC) components required for mobile payments in physical stores on iOS devices, per the release. This exclusivity raises concerns about potential anti-competitive behavior, as it limits the entry of third-party mobile wallet and payment service providers.

In response to the Commission’s concerns, Apple has offered several commitments to address the competition issues, according to the release.

These commitments include allowing third-party mobile wallet and payment service providers to access and interoperate with the NFC functionality on iOS devices through application programming interfaces (APIs) free of charge, without relying on Apple Pay or Apple Wallet, the release said.

These commitments would be applied to all third-party mobile wallet app developers established in the European Economic Area (EEA) and all iOS users with an Apple ID registered in the EEA, per the release.

Apple would also commit to providing features and functionalities like defaulting preferred payment apps, access to authentication features like FaceID, and a suppression mechanism, according to the release.

The company would also apply fair, objective, transparent and non-discriminatory eligibility criteria for granting NFC access to third-party mobile wallet app developers, the release said. A dispute settlement mechanism would allow independent experts to review Apple’s decisions regarding NFC access denial.

The proposed commitments would remain in force for 10 years and be monitored by a designated trustee reporting to the EC, according to the release.

The EC’s investigation into Apple’s potential violations of European Union (EU) competition rules was launched on June 16, 2020.

The Commission sent a statement of objections to Apple on May 2, 2022, expressing its preliminary view that Apple abused its dominant position in the mobile wallet market on iOS devices.